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Bang Si-hyuk. (Photo: HYBE) |
[Alpha Biz= Paul Lee] Seoul, South Korea — July 9, 2025 — The Financial Services Commission (FSC) of South Korea is set to refer Bang Si-hyuk, Chairman of HYBE (formerly Big Hit Entertainment), to the prosecution on charges of fraudulent securities transactions under the Capital Markets Act.
According to sources familiar with the matter, the FSC's Securities and Futures Commission (SFC) recently held a Capital Markets Investigation and Deliberation Committee meeting and decided to move forward with the criminal complaint. A formal resolution is expected during the SFC’s regular session next week.
Chairman Bang is accused of misleading early investors in 2020 by stating that HYBE had no plans to go public at the time, just months before the company’s eventual IPO in October of that year. Based on those assurances, a group of early investors sold their stakes to three private equity funds (PEFs), reportedly affiliated with Bang’s personal acquaintances.
The PEFs subsequently reaped substantial profits when HYBE’s shares debuted on the KOSPI at double the IPO price and hit the upper trading limit on its first day—a phenomenon locally dubbed a "ddasang" (IPO price × 2, then limit-up). It is estimated that the gains amounted to several hundred billion won.
Of particular concern to regulators is a separate shareholder agreement allegedly signed between Chairman Bang and the PEFs, under which Bang was to receive a portion of the capital gains—reportedly around KRW 400 billion (approx. USD 290 million). This agreement was not disclosed during the Korea Exchange’s IPO review process or in the securities registration statement submitted to the Financial Supervisory Service (FSS).
The FSC views this omission, along with the alleged deception of early investors, as constituting fraudulent misrepresentation and unfair trading under the Capital Markets Act, and is preparing to file a formal complaint with the prosecution.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
