South Korean authorities are seeking to arrest Bang Si-hyuk, the billionaire founder behind global K-pop phenomenon BTS, on charges of fraudulent trading that allegedly netted him approximately $136 million.
Police have requested prosecutors obtain an arrest warrant for the 53-year-old mogul, accusing him of misleading investors in 2019 by claiming his company Hybe was unlikely to go public while secretly preparing for its market debut. Hybe, formerly known as Big Hit Entertainment, launched on South Korea's Kospi exchange in October 2020 with shares that more than doubled their initial offering price.
"We regret the police's request for an arrest warrant," Bang's legal team stated on Tuesday. "We will continue to co-operate with all legal procedures and make every effort to clearly explain our position."
Investigators allege Bang entered into undisclosed profit-sharing agreements with private equity funds before Hybe's public listing, receiving a 30% cut of illicit proceeds when those funds sold their stakes post-IPO. The case has already resulted in raids at Hybe's headquarters, frozen assets, and travel restrictions imposed on Bang since August.
This legal drama unfolds as BTS—Hybe's most valuable asset—embarks on their first world tour in nearly four years. Industry analysts estimate the sold-out global tour could generate over $1 billion for the company. When the tour was announced in January, Hybe's shares surged to a four-year high, adding more than 1 trillion won to its market value.
Under South Korean law, individuals convicted of making 5 billion won or more in illicit proceeds face prison sentences ranging from five years to life. The case represents part of a broader crackdown on stock manipulation in South Korea, where authorities have recently established specialized investigation teams and implemented stricter penalties.
Bang, who co-founded JYP Entertainment before establishing Hybe in 2005, has seen his personal fortune skyrocket alongside BTS's unprecedented success. From an estimated $770 million in 2019, his net worth now exceeds $2 billion, largely tied to his substantial holdings in Hybe.
Hybe maintains that it acted properly throughout the IPO process, stating it provided relevant agreements to underwriters who advised that public disclosure was unnecessary. The company's shares fell 2.3% following news of the arrest warrant request, underperforming against the broader market's gains.