Police have sought an arrest warrant for HYBE Chairman Bang Si-hyuk, who is under investigation for alleged violations of the Capital Markets Act. The news has significantly impacted the company’s stock prices.
The financial crime investigation team of the Seoul Metropolitan Police Agency announced on the 21st that it had applied for an arrest warrant for Bang on charges of fraudulent transactions. This development comes approximately 16 months after the investigation began and about five months after Bang was last questioned in mid-November 2025.
Bang is accused of misleading HYBE investors in 2019 by falsely stating there were no plans for a stock listing. This allegedly led investors to sell shares to a specific private equity fund, only for the company to be listed later.
Police allege that Bang acquired nearly 200 billion won (approximately $145 million USD) in illicit gains by receiving 30% of the sale profit, based on a confidential agreement made with the private equity fund prior to the listing.
The Capital Markets Act prohibits obtaining financial benefits through falsehoods or fraudulent schemes related to financial investment products, including unlisted stocks.
Violations resulting in profits exceeding 5 billion won are punishable by life imprisonment or a prison term of more than five years.
Police, who received intelligence regarding these allegations in late 2024, conducted searches and seizures at the Korea Exchange and HYBE in June and July 2025 and imposed a travel ban on Bang.
The prolonged police investigation reportedly imposed various restrictions on Bang’s external activities.
On April 20, the U.S. Embassy in Korea sent a letter to Yoo Jae-seong, Acting Commissioner of Police, requesting the lifting of Bang’s travel ban to permit him, HYBE CEO Lee Jae-sang, and Vice President Kim Hyun-jung to visit the U.S.
In response, Seoul Police Commissioner Park Jung-bo stated, “We will review the appropriateness of lifting the travel ban and adhere to legal principles. The investigation is nearing completion, and legal reviews are underway. The case is expected to conclude soon.”
Bang faced controversy in August 2025 when he was seen in the U.S. with BJ Juice Se-yeon. With the recent application for an arrest warrant over fraudulent transactions, the ‘owner risk’ associated with HYBE is becoming increasingly pronounced.
When news of the arrest warrant application broke on the morning of April 21, HYBE’s stock price dropped to 244,000 won but ultimately closed at 250,000 won, a 1.96% decrease from the previous day.
Meanwhile, Bang’s representatives contend that there was no deceit; instead, the initial investors requested the transactions, and the profit-sharing conditions were first proposed by them.
