South Korean authorities have barred HYBE Chairman Bang Si-Hyuk from leaving the country as they probe alleged stock fraud tied to the company's 2020 initial public offering.
The Seoul Metropolitan Police Agency's Financial Crimes Investigation Division confirmed on Wednesday that it imposed the travel restriction when Bang returned from the United States on August 11 to cooperate with the inquiry. He is now officially prohibited from traveling abroad while under investigation for possible violations of the Financial Investment Services and Capital Markets Act.
Investigators suspect that Bang misled early investors in 2019 by telling venture capital firms and other shareholders that HYBE had no plans to list shares publicly. Believing the company would remain private, those investors sold their holdings to a special purpose company established by a private equity fund linked to HYBE executives. In reality, HYBE was already preparing for its initial public offering, according to police allegations.
After the IPO process began, the special purpose company sold the acquired shares at a higher price, and Bang is alleged to have received 30 percent of the profits under a confidential agreement. Authorities estimate his personal gain at roughly 190 billion won (about US$138 million).
The probe officially opened late last year following internal intelligence tips. On June 30, detectives raided the Korea Exchange in Yeongdeungpo District, seizing documents related to HYBE's IPO review. A separate search on July 24 targeted HYBE's headquarters in Yongsan District, where officers collected additional records.
Bang appeared for questioning as a suspect on September 15 and again on September 22. Before his first session at the Seoul Metropolitan Police Agency's Financial Crimes Investigation Unit in Mapo District, he told reporters, "I apologize for causing concern due to this matter. I will cooperate fully with the investigation." His legal team maintains that all IPO procedures complied with relevant laws and rejects any claims of wrongdoing.
Under South Korea's Capital Markets Act, it is illegal to earn financial gains by providing false information about unlisted securities. Violations involving illicit profits exceeding 5 billion won can carry prison sentences ranging from five years to life. As part of standard investigative measures for high-profile financial suspects, the travel ban is designed to prevent Bang from fleeing jurisdiction while authorities build their case.
HYBE, the entertainment conglomerate behind global acts such as BTS, has declined to comment on ongoing police activities, noting only that it intends to comply with investigative requests. The company's shares have dipped slightly since news of the travel ban emerged, reflecting investor uncertainty over the potential legal fallout.
With police still reviewing seized materials and questioning witnesses, the case against Bang could move to the prosecution stage later this year. For now, the exit ban remains in effect, underscoring the seriousness of allegations that HYBE's founder may have abused insider information for personal gain.
