HYBE Chairman Bang Si-hyuk Faces Arrest Warrant for Alleged Fraudulent Misconduct Against Investors...Major Crisis 20 Years After Company’s Founding

Bang Si-hyuk, chairman of HYBE—the top domestic music entertainment company—has been subject to an arrest warrant issued on charges of fraudulent misconduct under the Capital Market Act. The Financial Crime Investigation Team of the Seoul Police Agency submitted the warrant request to the Seoul Southern District Prosecutors’ Office. This represents a severe crisis for HYBE, which has now faced such challenges more than 20 years since its establishment.

The core of the allegations dates back to 2019. Bang is accused of deceiving investors by claiming there were no plans to list the company’s shares, allowing him to sell those shares to private equity funds affiliated with him before ultimately bringing HYBE to the stock market. It is estimated that this action resulted in investors receiving illicit profits totaling around 200 billion won.

Born in 1972, Bang began his musical career after winning a bronze medal at the 6th Yoo Jae-ha Music Competition in 1994. Starting in 1997, he worked at JYP Entertainment, producing hit songs such as G.O.D.’s “Blue Balloon” and “0%” and B.I.’s “Bad Guy.” After leaving to found Big Hit Entertainment in 2005, he continued to create successful tracks like Baek Ji-young’s “It Feels Like I’ve Been Shot” and 2AM’s “I Can’t Let You Go Even If I Die,” establishing himself as a renowned songwriter.

Big Hit propelled BTS to global stardom after debuting the group in 2013. The group’s success in the international music market led to rapid expansion for the company. Bang subsequently acquired companies such as Pledis, where SEVENTEEN is under contract, SOOS MUSIC, the agency for GFRIEND, and American company Ithaca Holdings, transforming the firm from a smaller entertainment company into the industry leader it is today. In October 2020, HYBE became the first domestic entertainment company to go public on the KOSPI market. In 2024, it was designated as a publicly disclosed enterprise group for the first time among entertainment companies.

Currently, Bang holds 28.86% of HYBE’s shares, making him the largest shareholder and chairman of the board, with direct involvement in the company’s management. Notably, he exerts absolute influence over the company’s core intellectual property, including its artists and music, going beyond the role of a simple owner.

As the chief producer of BTS’s new album “ARIRANG,” Bang led its creation. Last year, he organized a massive songwriting camp in the United States to work on new tracks and proposed key concepts such as incorporating the Arirang folk song into the track “Body to Body” and holding a large-scale comeback show in Gwanghwamun Square. He is also involved in composing music for most of HYBE’s groups, including TOMORROW X TOGETHER, CORTIS, LE SSERAFIM, and ENHYPEN.

Bang further pursued a “multi-home, multi-genre” strategy aimed at expanding K-pop beyond its borders by developing local artists. Through this approach, he brought forth various local groups such as KATSEYE (in the United States), AOEN (in Japan), and Santos Bravos (in Latin America). He even appeared in the audition program used to select KATSEYE members.

As legal risks related to Bang’s significant influence within the company become a reality, there are concerns that this could impact HYBE’s content production efforts as well as its overseas operations in regions such as India and Latin America.

HYBE’s financial performance also warrants attention. Last year, the company recorded its highest annual revenue on a consolidated basis, at 2.65 trillion won. However, due to costs associated with launching new artists and restructuring the business model, its operating profit declined by 72.9% compared to the previous year. HYBE is currently facing both positive factors, such as BTS’s upcoming comeback, and negative factors, including the legal risks posed by its chairman.

Bang’s legal team expressed regret over the warrant request, stating, “It is unfortunate that an arrest warrant was issued despite our long-term and diligent cooperation with the investigation.” They added, “We will fully comply with all future legal procedures and do our best to clarify the situation.” On the day of the warrant application, HYBE’s share price closed at 249,000 won, a 2.35% drop from the previous day’s closing price.