BTS’s HYBE Chairman Bang Si-hyuk to Be Prosecuted for Alleged IPO Fraud

Financial authorities in South Korea are preparing to file a criminal complaint against Bang Si-hyuk, chairman of HYBE and the mastermind behind BTS, over alleged fraudulent activity tied to HYBE’s IPO. According to investigators, Bang misled early investors, funneled shares to a private equity fund (PEF), and personally profited without disclosure. The implications go far beyond K-pop — this is a financial scandal with major market consequences.

Table of Contents

• 1. What’s Going On
• 2. What Are the Allegations
• 3. Legal Implications
• 4. Why This Matters Now
• 5. HYBE’s Response
• 6. What’s Next
• 7. Final Thoughts
• 8. FAQ

1. What’s Going On

On July 7, 2025, South Korea’s Capital Market Investigation Committee voted to recommend criminal prosecution against Bang Si-hyuk and others at HYBE. The formal decision is expected on July 16, when the Securities and Futures Commission meets. If finalized, this will mark one of the highest levels of enforcement the financial regulator can impose on an individual.

This case centers around HYBE’s IPO process back in 2020, during which Bang is accused of concealing key information from investors.

2. What Are the Allegations

• Investor Deception: In 2019, Bang reportedly told existing shareholders that HYBE had no plans to go public, while the company was already taking steps toward its IPO.

• Insider Deal via Private Equity Fund: A private equity fund allegedly linked to Bang’s personal associates acquired shares from those misled investors.

• Profit Sharing: After HYBE’s IPO, Bang received around 400 billion won (about 290 million USD) — roughly 30% of the profit generated by the fund.

• Non-Disclosure: This profit-sharing agreement was never publicly disclosed in HYBE’s official filings, raising serious transparency concerns and accusations of unfair trading.

                            

Source: Yonhap News / February 2025, 64th Annual General Meeting of the Federation of Korean Industries  

3. Legal Implications

According to Article 178 of the Capital Markets Act, fraudulent unfair trading — especially if it generates more than 5 billion won in gains — can lead to serious criminal penalties, including a minimum of five years in prison and possibly a life sentence.

This could become the first major criminal referral under President Lee Jae-myung’s administration, which has pledged zero tolerance for capital market abuses.

4. Why This Matters Now

This case comes at a time when South Korea is attempting to strengthen its financial market integrity. President Lee’s administration has introduced a “one-strike-out” policy for market manipulation and financial misconduct.

If Bang Si-hyuk, a high-profile figure with global influence, is prosecuted, it will signal that no one is above the rules — not even the man behind BTS’s global empire.

It also raises broader questions about how IPOs are conducted, the responsibility of corporate leaders, and the protection of minority investors.

5. HYBE’s Response

“We regret any concern this situation may have caused. HYBE’s IPO was conducted in accordance with all relevant laws and procedures. We are cooperating fully with the financial authorities and will clarify the facts.”

They have pledged to submit supporting documents and explain the legality of the IPO process in detail.

6. What’s Next

• July 7: The internal decision to recommend prosecution was made.
• July 16: The Securities and Futures Commission will officially review and finalize the recommendation.
• Later: If accepted, prosecutors will launch a full criminal investigation.

Investors and the public will closely watch HYBE’s stock and reputation as the case develops.

7. Final Thoughts

Bang Si-hyuk is not just a music producer — he’s one of South Korea’s most influential business figures. This case isn’t about celebrity gossip. It’s about corporate accountability, market trust, and the integrity of the financial system.

If the allegations are proven true, it may mark a turning point for how South Korea handles high-level financial misconduct in the entertainment sector.

8. FAQ

Q1. What exactly is Bang accused of?
He allegedly misled investors about HYBE’s IPO plans, funneled their shares through a private fund run by associates, and received a portion of the post-IPO profits — all without proper disclosure.

Q2. What could happen if he’s found guilty?
He could face a minimum of five years in prison, and possibly a life sentence depending on the scale of the gains and severity of the violations.

Q3. Will this affect BTS or HYBE’s brand?
It already has. Even if BTS members are not involved, public trust in HYBE as a company may decline, and its market valuation could take a hit.

---

Would you trust a company if the founder was caught hiding millions from investors? Let us know your thoughts below.