Prosecutors Reject Arrest Warrant for HYBE Chairman Bang Si-hyuk Over Fraud Allegations

In a significant development reported by The Hankyoreh, South Korean prosecutors have rejected a police request for an arrest warrant against HYBE Chairman Bang Si-hyuk, who is under investigation for alleged fraudulent stock transactions. The Seoul Southern District Prosecutors' Office stated that the evidence presented by the police was insufficient to warrant detention at this stage, requesting further investigation.

The police had sought the warrant after a five-month legal review, accusing Bang of deceiving existing HYBE investors with assurances of no immediate IPO plans. The accusation is that he then facilitated the sale of his shares to a private equity fund managed by an acquaintance, reaping an alleged profit of approximately 190 billion won (around $140 million USD) before HYBE's public listing. This alleged scheme has been under investigation for over a year, involving searches of HYBE's headquarters and the Korea Exchange, as well as the freezing of Bang's assets and multiple interrogations.

The handling of this case has been marked by apparent friction between the police and prosecution. The prosecution had previously rejected two search and seizure warrant requests from the police, leading to a complex investigative process. The Financial Services Commission also referred Bang to the prosecution for alleged violations of the Capital Markets Act. The police's lengthy investigation, followed by the rejection of their arrest warrant request, has drawn criticism for perceived delays. As the investigation continues, the focus remains on the alleged fraudulent transactions and the substantial profits involved, with the legal proceedings likely to be closely watched by the entertainment and financial industries in South Korea.

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We determined that there was insufficient evidence regarding the grounds requiring detention at this stage, and have requested supplementary investigation (from the police).