South Korean police raided HYBE's headquarters in Yongsan, Seoul, on Thursday morning as part of an investigation into alleged stock fraud by chairman Bang Si-hyuk
HYBE, Bang Si-hyuk
South Korean Police raided the headquarters of Hybe, the agency behind K-pop sensation BTS, in Yongsan, Seoul, around 9 a.m. Thursday, as part of an ongoing investigation into alleged stock fraud committed by business chairman Bang Si-hyuk.
All about the raid
The raid was carried out by the Seoul Metropolitan Police Agency's financial crime branch, which is probing charges that Bang misled early investors and made illicit gains worth over 400 billion won (approx. Rs 25000cr) ahead of the company's IPO in October 2020.
The search and seizure warrant was reportedly issued by the Seoul Southern District Court on Wednesday, making it the first time officials had executed one in connection with the case.
Hybe claimed it has no formal statement on the subject.
Police declined to comment, stating that "no specific details can be confirmed at this time."
The operation comes just a week after the Securities and Futures Commission, part of the Financial Services Commission, filed a criminal complaint against Bang, accusing him of violating the Capital Markets Act by engaging in unfair trading practices.
Police had previously requested search warrants on April 30 and May 28, but prosecutors denied both. The amended warrant was issued following the commission's formal complaint on July 16.
What happened in the case with BTS?
Previously, the Agency was sued for trading insider information on BTS's military enlistment. Kim, a 37-year-old employee of HYBE subsidiary Source Music, was sentenced to 10 months in prison on Tuesday, with a two-year suspension and a punishment of 231 million won (about Rs 1.45 crore) for violating the Financial Investment Services and Capital Markets Act.
Former employees Lee, 33, of subsidiary BigHit Music, and Belift Lab, 41, were sentenced to six months in prison, suspended for two years, and fined 51 million and 65 million won, respectively.
The defendants allegedly sold all of their HYBE stock before the company made a public announcement on June 14, 2022, via YouTube video, that BTS will halt group operations since member Jin had joined. They avoided losses of nearly 230 million won by doing this.
The stock price of HYBE decreased 24.78 percent the day after the announcement of BTS.
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