Following mounting allegations of fraudulent stock transactions ahead of HYBE’s 2019-2020 IPO, Chairman Bang Si-hyuk broke his silence on August 6, 2025, signaling a turning point in the controversial saga. In an internal email to HYBE employees, Bang explained that despite his extended overseas commitments managing artists like BTS and business expansions, he chose to cut short his schedule to promptly return to South Korea and fully engage with ongoing investigations by multiple government authorities. This marks the first time the HYBE founder has publicly addressed the issue, amid a slew of coordinated legal and regulatory probes targeting the company.
The allegations center around a scheme where Bang allegedly misled existing investors by denying any IPO plans, pushing them to sell shares to a special purpose company affiliated with a private equity fund owned by an acquaintance. Financial authorities revealed that Bang signed a shareholder agreement sharing 30% profits with this fund but concealed such arrangements during HYBE’s IPO process. Post-listing, the fund reportedly sold shares for significant gains, resulting in Bang and former executives profiting unfairly to the tune of approximately 1,900 billion won from a total estimated 4,000 billion won in illicit gains. Reflective of the serious nature of these allegations, Seoul’s Financial Crimes Investigation Unit conducted a search of HYBE’s Yongsan headquarters on July 24, 2025, while the Seoul Southern District Prosecutors’ Office oversees the broader capital market fraud case.
Alongside prosecutorial and police actions, the National Tax Service’s inspection team, known locally as the ‘business death angel’, launched an intense special tax audit of HYBE starting July 29, 2025. HYBE was named among 27 companies targeted for investigations into unfair stock market tax evasion. Despite these pressures, Bang maintains his innocence, reiterating that no personal gain was pursued at the expense of the company during the IPO. He expressed a willingness to cooperate fully and transparently in future investigations, aiming to clarify all facts and show accountability. Bang expressed cautious optimism that the truth will emerge through due process and reassured employees that his personal challenges would not hinder their creativity or drive.
This controversy has sent shockwaves through the K-pop industry, given HYBE’s stature as a powerhouse behind global acts like BTS and NewJeans, and the visionary leadership of Bang Si-hyuk who revolutionized K-pop’s business model. The ongoing investigations by multiple government agencies—police, prosecution, financial, and tax authorities—underscore the Korean government’s stringent crackdown on capital market misconduct to safeguard market integrity. Fans and industry stakeholders closely watch as Bang’s return and cooperation could mark the beginning of a decisive resolution for one of the largest scandals in the history of South Korea’s entertainment business.
