Bang Si-hyuk case referred to prosecutors after 20-month police probe

Police have wrapped up their roughly 20-month investigation into Hybe Chairman Bang Si-hyuk over allegations of fraudulent unfair trading and referred him and four other Hybe executives and associates to prosecutors, concluding the police leg of a two-track probe that also involves financial regulators working under prosecutorial direction.

The Seoul Metropolitan Police Agency Metropolitan Investigation Unit's financial crimes investigation team said Thursday it had referred Bang and four others — Hybe Chief Executive Lee Jae-sang (who at the time headed the innovation and growth center), former Hybe Chief Financial Officer Kwon Yong-sang, Easton Equity Partners Chief Executive Yang Jun-seok and NewMain Equity Chief Executive Kim Chang-hee — to the Seoul Southern District Prosecutors' Office without seeking their detention, on charges of fraudulent unfair trading under the Capital Markets Act.

Police believe Bang and the others obtained illicit gains totaling 263.1 billion won ($192 million) through Hybe's stock market listing process, and applied for a pre-indictment preservation order, which a court granted in full.

Bang is accused of telling existing Hybe investors, including venture capital firms, in 2019 — before the company's initial public offering — that there were no IPO plans, thereby inducing them to sell their stakes to a special purpose company set up by a private equity fund connected to him, while in fact proceeding with the listing to pocket illicit gains.

Police determined that Bang was substantively involved in both the preparation for Hybe's listing and the establishment of the private equity fund and recruitment of investors. While encouraging existing shareholders to sell their shares on the basis that there were no listing plans, he simultaneously informed prospective fund investors that a listing was the goal, police said.

Police concluded that Hybe management and the private equity fund associates concealed listing information — which management had monopolized — from existing shareholders in pursuit of their shared objective of profiting from the listing.

Investigators determined that the conduct constituted not merely a violation of individual private interests but a "social harm" that undermined the fairness and integrity of capital markets.

Police had launched a preliminary inquiry in December 2024 based on their own intelligence before opening a full-scale compulsory investigation last year. They raided the Korea Exchange in June last year, followed by Hybe's headquarters in Yongsan-gu, Seoul, in July.

In August of the same year, police imposed a travel ban on Bang, then summoned him five times between September and November to obtain statements.

Police applied for arrest warrants for Bang on April 21 and again on April 30, but prosecutors rejected both requests, saying the grounds for detention were insufficiently substantiated and that further investigation was needed.

Even after the two failed warrant bids, police continued discussions with prosecutors but were unable to bridge the gap in their legal interpretations, sources said.

Police have pursued charges of fraudulent unfair trading under the Capital Markets Act, while prosecutors are understood to favor applying fraud charges under the Criminal Act instead.

Meanwhile, police suspended their investigation into Kim Jung-dong, who served as Hybe's chief investment officer at the time and was also under investigation. An arrest warrant has been issued for Kim, who has been placed on a domestic wanted list and is the subject of an Interpol red notice.

Separately from the police referral, the Seoul Southern District Prosecutors' Office has been directing its own investigation through Financial Supervisory Service special judicial police officers and is examining the related allegations independently.

The Securities and Futures Commission under the Financial Services Commission referred Bang to prosecutors in July last year, finding probable cause to suspect him of violating the Capital Markets Act's prohibition on unfair trading.