South Korean police have arrested Hybe chairman Bang Si-hyuk as they widen their investigation into alleged investor fraud linked to the company behind BTS. The case alleges that before Hybe’s stock market debut, Bang defrauded investors and then profited from a private deal worth more than 200 billion won, or about US$136 million. The development comes at a tense time for Hybe, with BTS returning to the road after military service and the company looking into internal disputes.
Bang Si-hyuk’s arrest case and fraud allegations
The Associated Press reported on Tuesday that the Seoul National Police Agency had asked prosecutors to seek a court order to arrest Bang. Police are investigating reports that in 2019, Hybe told investors it had no plans to go public, prompting some to sell their shares to a private equity fund. Investigators believe the fund paid Bang about 200 billion won under a side deal that promised him 30 percent of the profits from stock sales after the IPO. Bang has been on a travel ban since August.Bang’s legal team did not directly respond to the allegations in statements to The Associated Press. Instead, he regretted that police were seeking his arrest “despite his full and consistent cooperation with the investigation over a long period of time.” The statement added, “We will continue to cooperate with all legal proceedings and will make every effort to explain our position clearly.” Hybe officials also said Bang denies wrongdoing.
Hybe BTS comeback and company confusion
The investigation poses a major image problem for Hyber, as BTS resumes global activities after a nearly four-year hiatus related to South Korea’s mandatory military service rules. The group held a free comeback concert in Seoul last month in front of tens of thousands of fans, and then continued with shows in Goyang and Tokyo. BTS will also kick off their US tour with a concert in Tampa, Florida later this month.Bang founded Hybe (then called Big Hit Entertainment) in 2005 and helped make BTS a global force. In 2021, the company spent about USD 1 billion to buy Ithaca Holdings from Scooter Braun. Hybe also manages acts such as Seventeen, Le Sserafim and Katseye. At the same time, he has faced a public battle between Bang and producer Min Hee-jin over NewJeans, a dispute that has led to the courts and continues to cast a shadow over the company.Disclaimer: The information in this report is based on a legal hearing reported by a third party source. The details given are allegations made by the parties involved and are not proven facts. The case continues, and a final verdict has not been reached. The publication does not claim that the allegations are true.
