HYBE Chair Faces Charges Over 2020 IPO Fraud

Bang Si-hyuk, founder and chairman of HYBE (formerly Big Hit Entertainment), is facing potential criminal prosecution in South Korea for alleged securities fraud related to HYBE's 2020 IPO. Authorities allege Bang misled early investors by denying plans for an IPO, leading them to sell shares to private equity funds connected to him while preparations for going public were underway. Confidential profit-sharing agreements, reportedly guaranteeing Bang 30% of gains and shielding the private funds from losses, were not disclosed in official filings in possible violation of the Capital Markets Act. These undisclosed deals allegedly earned Bang about 400 billion won (approximately $290 million USD) after the IPO. HYBE has expressed regret over the controversy, is fully cooperating with authorities, and maintains its IPO was conducted in compliance with legal standards at the time. The Securities and Futures Commission is set to review the prosecution recommendation on July 16, with reversal considered unlikely.