Application for Arrest Warrant Against Bang Si-hyuk... Owner Risk Materializes for HYBE, the “K-Pop Kingdom”

HYBE, South Korea’s largest music entertainment company, is facing its greatest crisis since its founding. This is because the Financial Crime Investigation Team of the Seoul Police Agency has filed an application for an arrest warrant against its founder and chairman, Bang Si-hyuk, turning the so-called “owner risk” into a reality.

The police have accused Chairman Bang of fraudulent misdealings under the Capital Market Act. The allegations state that in 2019, he deceived investors by claiming there were no plans to list the company’s shares, thereby prompting them to sell their stakes to private equity funds affiliated with him. He then obtained an illicit profit of approximately 19 billion won during HYBE’s subsequent listing process.

Bang Si-hyuk is the person who founded Big Hit Entertainment in 2005 and launched BTS in 2013, transforming the company into a global entertainment enterprise. HYBE successfully listed on the KOSPI market in 2020 and was designated as a publicly disclosed corporate group for the first time in the entertainment industry in 2024. Currently, Chairman Bang serves as the largest shareholder holding 28.86% of HYBE’s shares and also acts as chairman of the board, directly participating in management.

Chairman Bang exerts absolute influence not only over the management team but also over the company’s core intellectual property, including artists and music. As the Chief Producer of BTS’s latest album “ARIRANG,” he personally oversaw its production. He has also been involved in songwriting for various HYBE-affiliated groups such as TOMORROW X TOGETHER, LE SSERAFIM, and ENHYPEN. Additionally, through his “multi-home, multi-genre” strategy, he introduced locally focused groups like KATSEYE (in the United States), AONE (in Japan), and Santos Bravos (in Latin America).

Within the music industry, there are concerns that Chairman Bang’s legal troubles could impact content production and overseas operations at HYBE. Although HYBE recorded its highest annual revenue on a consolidated basis last year at 2.65 trillion won, its operating profit dropped by 72.9%, highlighting the need to improve operational efficiency.

Currently, HYBE is facing both a major positive factor in the form of BTS’s comeback and a significant negative factor due to its owner’s legal risks. Chairman Bang’s legal team expressed regret over the application for an arrest warrant despite their long-term and diligent cooperation with the investigation, stating that they will fully comply with future legal procedures. HYBE’s stock price dropped by 2.35% to 249,000 won following the news of the arrest warrant application, and the company is likely to be greatly affected by subsequent court decisions.