South Korean police have sought a detention warrant for Bang Si-hyuk, chairman of K-pop agency HYBE, over suspected illegal trading related to the company’s initial public offering.
The Seoul Metropolitan Police Agency said Bang is accused of violating capital market laws by misleading early investors prior to HYBE’s listing and directing them to sell their shares to a private equity fund connected to his associates.
Alleged Profit Scheme
Police allege that after HYBE went public the fund sold its stake and Bang received about 30% of the profits under a prior shareholder agreement, earning roughly 190 billion won ($129.1 million) in illicit gains.
Bang has previously denied any wrongdoing.
A statement from HYBE citing Bang’s legal counsel said on Tuesday: “We regret that a detention warrant has been sought despite our full and consistent cooperation with the investigation over an extended period.
“We will continue to cooperate with all legal procedures and make every effort to clearly explain our position,” it said.
Bang is also the founder of HYBE, the music powerhouse behind global K-pop supergroup BTS.
HYBE shares reversed course after the report and were down 2.4% by the market close, compared with a 2.7% rise in South Korea’s benchmark KOSPI.
Travel Ban to U.S.
The National Police Agency confirmed that the U.S. embassy in Seoul recently sent a letter asking authorities to allow Bang to travel to the United States, despite a travel ban imposed during the investigation.
According to police, the letter sought a temporary suspension of the ban, citing plans for Bang and other senior executives to attend an event to mark U.S. Independence Day and hold talks related to the ongoing BTS global tour.
Bang has been barred from leaving South Korea since August last year.
The warrant request will be reviewed by the Seoul Southern District Prosecutors’ Office, and if prosecutors seek a detention warrant, a court typically holds a hearing within two to three days to decide whether to order Bang’s arrest, according to local reports.
(With inputs from Reuters)
