The architect of the modern K-pop boom, Bang Si-hyuk, is facing arrest by South Korean police over claims he illegally gained millions in an investor fraud scheme.
The Seoul Metropolitan Police Agency confirmed the move on Tuesday, stating that Bang is suspected of violating national capital market laws. Investigators allege he misled early investors ahead of HYBE’s stock market listing.
According to police, Bang used his position to steer early investors into selling shares to a private equity fund linked to his associates.
Police claim the fund later sold the shares at inflated prices following HYBE’s public debut, driven by global demand for its flagship act, BTS.
Authorities say they uncovered an undisclosed agreement entitling Bang to around 30 per cent of the profits. They estimate he gained roughly 190 billion won (£104 million / $129.1 million), depriving early investors of fair value.
Bang has previously denied any wrongdoing or market manipulation.
HYBE issued a statement on Tuesday, citing Bang’s legal team, criticising the warrant request.
"We regret that a detention warrant has been sought despite our full and consistent cooperation with the investigation over an extended period," the statement read. "We will continue to cooperate with all legal procedures and make every effort to clearly explain our position."
HYBE shares fell 2.4 per cent after the announcement, reversing earlier gains. The drop contrasted with a 2.7 per cent rise in South Korea’s benchmark KOSPI index.
Investors are increasingly concerned about potential disruption to leadership as the company relies heavily on global touring revenue.
The case has also prompted an unusual diplomatic development. The National Police Agency confirmed that the United States Embassy in Seoul requested permission for Bang to travel to the U.S., despite an existing travel ban.
Police said the request cited plans for Bang and HYBE executives to attend a U.S. Independence Day event in July and to hold business talks linked to BTS’s global stadium tour.
A spokesperson for the U.S. Embassy in Seoul told Reuters the embassy "did not have anything to add on that matter."
Bang remains barred from leaving South Korea. Prosecutors at the Seoul Southern District Prosecutors’ Office will review the police request.
If approved, a court hearing is typically held within two to three days, where a judge will decide whether to issue a detention warrant. An arrest would mark an unprecedented moment for the global music industry.
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