Seoul: HYBE Chairman Bang Si-hyuk, creator of the acclaimed K-pop group BTS, is under legal scrutiny following accusations of violating Korea's Capital Markets Act in 2019. He is alleged to have misled investors and venture capital firms by claiming that HYBE's initial public offering would be postponed. This misinformation reportedly led investors to sell shares to companies associated with HYBE, resulting in Bang accruing approximately 190 billion won ($129.1 million).
According to Yonhap News Agency, the investigation into Bang's potential stock fraud is a significant case, especially in light of President Lee Jae Myung's commitment to revitalize Korea's undervalued capital market. The police, after questioning Bang five times, have requested a court-issued arrest warrant for him. Under the Capital Markets Act, a fraudulent gain of 5 billion won or more can lead to a minimum five-year prison sentence, or even life imprisonment.
HYBE asserts that Bang adhered to the regulations concerning the IPO and has pledged to cooperate with ongoing investigations. The company hopes that the allegations will be resolved legally and remain separate from BTS-related matters. Following a grand comeback show in Seoul on March 21, BTS is set to perform in Goyang, Gyeonggi Province, and Tokyo, before starting their U.S. tour in Tampa, Florida, on April 25.
BTS recently released their fifth studio album, "ARIRANG," on March 21, marking their return after a four-year hiatus during which the members fulfilled their mandatory military service. Bang served as the executive producer for this album. The group's successful return has somewhat overshadowed the issues surrounding HYBE.
Amidst the excitement surrounding BTS, the U.S. Embassy in Seoul reportedly requested the temporary lifting of Bang's travel ban, imposed since last August, to allow him to assist with the BTS tour and participate in the Fourth of July celebrations. This year, the event is expected to be exceptionally grand, marking the 250th anniversary of U.S. independence. The embassy also requested travel allowances for two other HYBE executives, CEO Lee Jae-sang and Vice President Kim Hyun-jung.
However, the possibility of lifting Bang's travel ban seems unlikely now that an arrest warrant has been sought. President Lee has stressed the importance of boosting the domestic capital market, warning last year that those manipulating stock prices would face severe consequences.
HYBE has stated that it did not request the U.S. Embassy's intervention and noted that the travel restriction has hindered Bang's work. The embassy's request presented a challenge for the investigative authorities, as Bang represents a crucial figure in K-culture's global influence. Nonetheless, the investigation takes precedence.
The manner of the U.S. Embassy's request reportedly bypassed formal protocols, communicating directly with the police rather than through the Ministry of Foreign Affairs. The embassy has declined to comment further on the matter. It is emphasized that adherence to protocol is essential in international affairs to ensure transparency and public acceptance when providing exemptions or temporary relief.