Police searched the headquarters of HYBE, the South Korean entertainment company behind global sensation boy band BTS, on Thursday over allegations of unfair share trading.
The raid took place at the company's Yongsan District office in central Seoul. This operation follows mounting accusations that founder and chairman Bang Si-hyuk, along with several executives, may have been involved in unfair share trading practices and misled early investors before HYBE's initial public offering in 2020.
The Seoul Metropolitan Police Agency said the investigation targets claims that Bang Si-hyuk deceived investors by stating HYBE had no plans to go public at the time. It is alleged that this information led early investors to sell their shares. Later, HYBE reportedly proceeded with the IPO, and Bang and executives are said to have gained substantial profits, which are estimated in the hundreds of billions of won.
The financial regulator, the Securities and Futures Commission, initially filed a formal complaint a week before the raid, arguing Bang Si-hyuk had violated South Korea's Capital Markets Act. Authorities say shares were sold to a special purpose company linked to Bang Si-hyuk and other former HYBE employees, who then benefited after the IPO. Investigators believe the company's founder personally earned a significant portion of the profits from this arrangement.
HYBE has acknowledged the police investigation and maintained that the IPO was done in accordance with all laws and regulations. The company stated, "We will take the necessary time to thoroughly demonstrate that the IPO was carried out in full compliance with laws and regulations," reaffirming their cooperation with authorities for "fact-finding efforts." Bang Si-hyuk remains the founder and largest individual shareholder of HYBE.
This is not the first time HYBE's internal share dealings have come under scrutiny. Earlier this year, there were reports that another former HYBE executive was under investigation for alleged insider trading involving shares of an affiliated company. That case was separate from the current probe focused on activities prior to the company's stock market debut, but raised fresh questions about governance within the K-pop powerhouse.
HYBE manages BTS and other popular acts and has expanded rapidly worldwide in recent years. However, these ongoing investigations into its founder and financial practices have put the company under intense public and regulatory observation. The police said the search and review of records will continue as they examine whether any violations of the country's capital markets or securities laws occurred.
