HYBE Founder Bang Si-Hyuk's Residence Raided For Two Days Amid Fraudulent Trading Case

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label HYBE's founder and chairperson Bang Si-Hyuk faced more trouble with regard to alleged financial fraud. The company head's residence was reportedly raided by authorities as part of the probe. Bang is currently accused of unfair share trading. He is under investigation for allegedly misleading early investors in 2019 by claiming HYBE had no plans for an IPO. Authorities claim he later transferred company shares to a special purpose company (SPC) created by a private equity fund involving HYBE executives. Earlier this month, his shares worth 157 billion KRW (about $107 million USD) were seized upon the Seoul Southern District Court's instructions.

Bang Si-Hyuk's residence raided

E Today reported that the Financial Supervisory Service's (FSS) Special Judicial Police for Capital Markets conducted a two-day search and seizure operation at Bang's home and office. The search took place between December 17-18 and was conducted as part of a comprehensive investigation into Bang's alleged fraudulent trading under the Capital Markets Act, for the alleged stock manipulation connected to the company’s pre-IPO activities.

Bang's assets frozen amid fraudulent trading case

Recently, South Korean media reported that the Seoul Southern District Court approved a prosecution request to freeze Bang's massive shares in HYBE on December 4. Reportedly, the prosecution had filed a request to block him from disposing of his shares as he is under investigation for illegal stock trading.

About the alleged financial fraud

Bang Si-Hyuk, the HYBE founder and chair is accused of misleading investors in 2019 by denying the company's IPO plans and persuading them to sell their shares to a special purpose company linked to a private equity fund he was connected with. HYBE, then called Big Hit Entertainment, went public in 2020. The private equity fund sold its shares after the IPO, and Bang allegedly pocketed approximately 30 percent of the earnings, which amounted to around 190 billion won ($131.2 million), under a preexisting deal. This pushed the police to begin a probe last year. Bang has since been referred to prosecution on charges of violating the Capital Markets Act.