HYBE founder Bang Si-hyuk apologises as he appears for questioning over alleged fraudulent activities: ‘I’ll cooperate’

HYBE chairman Bang Si-hyuk appeared before police on Monday for questioning over alleged violations of the Capital Markets Act for the first time. As quoted by Allkpop, Si-hyuk apologised “for causing concern”, adding that he will “faithfully cooperate with the investigation.” Si-hyuk heads the Korean entertainment company that operates as a record label, talent agency, music production company, event management and concert production company. It is best known for managing the K-pop group BTS among others.

Bang Si-hyuk appears for questioning for alleged fraud

Si-hyuk arrived at the Seoul Metropolitan Police Agency’s Financial Crimes Investigation Unit as a suspect in a case involving fraudulent transactions. Dressed in a suit, he addressed the media, “I sincerely apologise for causing concern with this matter. I will faithfully cooperate with today’s investigation.” He then entered the building.

What are the allegations against Si-hyuk

This is the first time Si-hyuk appeared before investigators. In 2019, Si-hyuk misled shareholders by telling them that the company didn’t have plans to go public, but later proceeded with an initial public offering. As per a KED Global report, after HYBE informed its existing shareholders that it had no plans to go public, some investors divested their stakes.

HYBE, then, started a process to go public after Si-hyuk allegedly signed a private shareholders’ agreement with local PEFs — STIC Investments Inc., Estone Equity Partners and New Main Equity — to share profits from a future listing. This deal remained undisclosed until HYBE’s stock plunged immediately after its IPO.

Investors met with heavy losses from the post-IPO sell-off. Si-hyuk reportedly received 30% of the gains through a private agreement. He reportedly got about 190 billion won ($137 million) from the deal. HYBE has found itself in troubled waters over the alleged failure to disclose the profit-sharing agreement between Si-hyuk and the PEFs.

What if he is convicted of fraud

If Si-hyuk is prosecuted and convicted of fraudulent disclosure and illicit gains, he could be jailed for five years or more. He reportedly could also face a life sentence if the profit exceeds 5 billion won, in accordance with the Capital Markets Act. Police began investigating after receiving intelligence and conducted a high-profile raid of HYBE’s headquarters a few months ago.