Recently, Korean media reported that HYBE founder Bang Si-hyuk has been issued a travel ban outside of South Korea amid allegations of stock market fraud, with claims that he gained 190 billion won ($134.9 million) in unfair profits in 2019, a year before HYBE’s IPO.
At that time, Bang Si-hyuk allegedly claimed there were no plans for HYBE to go public, prompting investors to sell their shares to a special purpose company (SPC) set up by a private investment fund created by HYBE’s top executives.
After HYBE became a publicly traded company, the SPC sold the acquired shares, and Bang Si-hyuk reportedly received 30% of the profits under a pre-arranged agreement, totaling nearly 190 billion won (about $135 million), raising accusations of misleading investors.
“We complied with all relevant laws and regulations at the time of the listing, and there are no legal issues,” was HYBE’s previous response to the accusations.
According to MBN, the police, specifically the financial crime investigation team, barred Bang Si-hyuk from leaving South Korea due to investigations related to violations of the Capital Market Act. The ban was imposed on August 11.
The report notes that travel bans are usually issued when strong evidence has been gathered or when investigators are confident they can prove the charges. In Bang Si-hyuk’s case, he has been indicted.
During the investigations by the National Tax Service into tax evasion cases involving Bang Si-hyuk and his partners through stock fraud, suspicions of offshore tax evasion by the company’s branch in the United States were also uncovered.
Furthermore, lawyers analyzing the situation concluded that Bang Si-hyuk is “more likely to be convicted,” estimating his chances of conviction between 40% and 60%, higher than usual cases.
Recently, Min Hee-jin, former chief executive of ADOR under HYBE, posted on her Instagram story featuring the song “Space Travel With Teddybear,” which sparked allegations of mocking Bang Si-hyuk’s recent travel ban.
