How HYBE’s Bang Si-hyuk went from K-pop visionary to the target of a criminal probe

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How HYBE’s Bang Si-hyuk went from K-pop visionary to the target of a criminal probe

Published: 24 Jul. 2025, 17:30 Updated: 25 Jul. 2025, 08:54

PARK EUN-JEE
[email protected]

Audio report: written by reporters, read by AI

HYBE Chairman Bang Si-hyuk and then Korea Exchange Chairman Jung Ji-won pose for a photo during Big Hit Entertainment’s listing ceremony at the Korea Exchange office in Yeouido, western Seoul, on Oct. 15, 2020. [JOINT PRESS CORPS]

[EXPLAINER]

Bang Si-hyuk, the creative force behind BTS and chairman of K-pop powerhouse HYBE, is widely considered a trailblazer in the industry — but now, he is the focus of a criminal probe.

The police raided the headquarters of HYBE on Thursday after financial regulators concluded that he reaped “unfair gains” estimated at 200 billion won ($146 million) from the listing of HYBE.

The case has drawn intense nationwide attention not only because of the high-profile suspect but also because the affected investors include the National Pension Service (NPS).

The NPS, which owns a 7.5 percent stake in HYBE, is the country’s largest institutional investor with $933 billion in assets under management, and the loss of potential earnings could impact pension payouts for retirees.

“The NPS placed their money into funds run by an investing firm, which was an early investor of Big Hit, and suffered significant losses by selling Big Hit shares to firms with ties to Bang,” a source said. HYBE was formerly Big Hit Entertainment.

What is Bang Si-hyuk accused of?

The prosecution, jointly with special judicial police at the Financial Supervisory Service, which handles some white-collar and fraud cases, is investigating whether Bang has engaged in irregular backdoor deals centered around the public listing of Big Hit Entertainment, a predecessor of HYBE. The Financial Services Commission (FSC) alleges that the chairman obtained an unfair profit amounting to around 200 billion won by misleading early investors into selling their shares in 2019 to private equity firms founded by his former employees.

In the process, Bang falsely suggested to the early investors that the listing of the entertainment agency would be delayed and they should sell their holdings to the investment firms, the FSC said in a statement, despite having actively prepared for the initial public offering (IPO) set for 2020.

The entertainment mogul then signed an agreement guaranteeing him 30 percent of the gains from the stock sale of the suspect investment firms — an arrangement that was concealed during the listing process.

The FSC concluded on July 16 that the findings violate the Capital Markets Act, referring the case to the prosecution.

“The Securities and Futures Commission filed a complaint with the prosecution against the largest shareholder and former executives of Company A for alleged violations of Article 178 of the Financial Investment Services and Capital Markets Act, based on unfair trading practices involving the deception of existing shareholders and the use of a structured private equity fund,” it said, referring to HYBE as Company A in keeping with its policy of not revealing the name under investigation.

The agency, for its part, said after the FSC statement, “It is regrettable that the explanation provided by our largest shareholder was not accepted, although the shareholder clarified that there was no pursuit of personal gain in the public listing during the Financial Supervisory Service’s investigation," adding, “However, we respect the financial authority’s decision and will do our utmost to actively clarify the related allegations in the upcoming investigation to restore the trust of the market and our stakeholders.”

An electronic board shows the stock price of Big Hit plunging 22.29 percent on Oct. 16 in 2020 after its listing the previous day. The drop came after Eastone Equity Partners offloaded its shares in Big Hit Entertainment. [YONHAP]

Is there any evidence of unfair trading?

For now, only circumstantial evidence exists. Founded by Kim Jung-dong, a former chief investment officer at Big Hit, and Lee Seung-seok, a former brand synergy division head, Eastone Equity Partners was set up in 2019 and closed in 2021 after reaping a sizable profit from the HYBE listing.

It only engaged in a single deal centered around HYBE, with its two funds having acquired pre-IPO shares worth a total of 130 billion won, equivalent to an 11.4 percent stake. Shortly after the successful public listing on Oct. 15, 2020, the fund unloaded its entire stake in the first few days of the debut, which instigated a steep decline in HYBE stock prices. On only the second day on the market, the stock dropped by 22.29 percent to close at 200,500 won.

A source in the financial industry confirmed that the entire profit from the transaction is estimated to be 1 trillion won, as widely reported by local media outlets. Bang pocketed around 200 billion won from the Eastone deal and another 200 billion won from the stock sale of other private equity firms, according to the source.

What does it mean for HYBE or its artists?

Experts say that the case will have a limited direct impact on the company and the artists, given that it appears to stem from a personal decision of Bang rather than being a corporate-wide scheme. If convicted, the chairman could face a sentence of up to 10 years or fines up to three times the gains should the actual earnings surpass 500 million won. His chairmanship could be at risk too, because major shareholders including the NPS and other board members could request his resignation.

As President Lee Jae Myung pledges a hardline response to stock market crimes — including a proposed one-strike-out rule — authorities may take an equally aggressive approach in their probe into Bang.

BY PARK EUN-JEE [[email protected]]