[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Asian Entertainment And Culture [@AsianEAC](/creator/twitter/AsianEAC) on x 7174 followers Created: 2025-07-03 05:38:36 UTC TL;DR HYBE was raided by police after prosecutors twice rejected warrants. The investigation targets Chairman Bang Si-hyuk, who allegedly received ₩400 billion KRW (~$290M USD) through a secret profit-sharing deal with private equity funds during HYBE's IPO. The deal wasn’t disclosed publicly, raising suspicions of unfair trading or even embezzlement. While HYBE claims it was a legal contract, authorities are digging deeper. Meanwhile, Korea’s financial regulators and prosecutors are now involved, and the case could have broader implications for investor trust in K-pop’s corporate world. === Here’s a revised and polished version of your text with improved English, corrected names and terminology, and a more professional tone for clarity and flow: Police Rejects Warrant Twice—Finally Conducts Search and Seizure of HYBE The Seoul Metropolitan Police Agency's Financial Crimes Investigation Unit has officially conducted a search and seizure of HYBE, South Korea’s top entertainment company, home to BTS, NewJeans, TOMORROW X TOGETHER, BOYNEXTDOOR, and LE SSERAFIM—all of whom are reportedly preparing for full-group comebacks next spring. This move came after two previously rejected search warrant requests by prosecutors, which had significantly delayed the investigation. Internally, police expressed frustration, with reports stating that they found it “difficult to understand” the reasons behind the rejections. On the third request, however, the prosecution granted approval—possibly influenced by pressure, as the Financial Supervisory Service (FSS) had already launched a separate investigation into HYBE. Bang Si-hyuk Under Investigation At the center of the investigation is Bang Si-hyuk, founder and chairman of HYBE. He is suspected of violating the Capital Market Act through fraudulent and unfair trading practices. In short: Bang is alleged to have received ₩400 billion KRW (approx. $XXX million USD) in personal profit tied to HYBE’s IPO. The central legal question is whether this sum was part of a legitimate private contract, as HYBE claims, or an unfair transaction, as the police suspect. Background: HYBE’s IPO and the Earn-Out Controversy On October 15, 2020, HYBE (then known as Big Hit Entertainment) went public on the KOSPI stock exchange. The IPO made headlines, with the company’s market cap exceeding ₩8 trillion KRW on the first day—surpassing the combined value of SM, JYP, and YG at the time. The stock’s initial offering price was ₩135,000 KRW, skyrocketing to ₩350,000 KRW before sharply falling. It took nearly a year for the price to recover to its peak. The major early sellers? Private equity firms like STIC Investments, Easton Equity Partners, and New Main Equity, who had acquired stakes in HYBE prior to its IPO and sold them shortly afterward for enormous profits. The Secret Contract These private equity firms reportedly entered into an earn-out agreement with Bang Si-hyuk prior to HYBE's listing. Under this deal, Bang would receive XX% of their investment profits once HYBE went public. This contract was not disclosed in the company’s securities filings, meaning only the involved parties were aware. HYBE has maintained that this was a legally sound private agreement backed by external legal counsel. However, police question whether it constituted an unfair and undisclosed transaction, particularly since it significantly benefited Bang while regular investors were left unaware. Timing of Investment Raises Questions The timing of the investments is also under scrutiny. For example: STIC Investments entered in 2018, acquiring a XXXX% stake in Big Hit and exiting by 2021. Easton PE shut down in December 2021 after cashing out. New Main Equity was founded in October 2019—just a year before the IPO. Adding to the mystery, in 2019 HYBE reportedly told shareholders, “We have no plans to go public.” If true, early shareholders may have sold their stakes based on that guidance. LB Investment, for instance, sold its shares to STIC and Easton PE. Notably, former HYBE CIO Kim Joong-dong played a key role in this transfer after joining Easton PE. Retail investors—unaware of the XX% profit-sharing agreement—may have interpreted the post-IPO stock crash as a failed investment, not knowing that insiders had already cashed out. Additionally, these private equity firms were exempt from “lock-up” restrictions, allowing them to sell shares immediately after the IPO. Could It Be Classified as Embezzlement? During the warrant rejection phase, legal experts debated whether the charge should be "embezzlement" instead of a Capital Markets Act violation. Under Article 357, Paragraph X of the Korean Criminal Act, a person who handles another’s business and receives money or property in violation of their duties after an illicit request could be charged with embezzlement. In plain terms: Bang is suspected of personally profiting from HYBE’s IPO process while handling corporate affairs—potentially misusing his fiduciary role. However, proving such illegal conduct (e.g., illicit requests) is legally complex and would require strong evidence. Latest Developments The Financial Supervisory Service (FSS) reportedly summoned Bang Si-hyuk for questioning at the end of last month. After the FSS completes its investigation, it is expected to hand the case over to the Seoul Southern District Prosecutors' Office, which specializes in financial crimes. In a separate case, the same prosecutors' office raided HYBE in May, investigating a former HYBE executive for insider trading using non-public information. With multiple agencies involved, coordination between the police, prosecutors, and the FSS is now critical as the case accelerates. Broader Implications President Lee Jae-myung has emphasized the importance of fair capital markets and investor protection since taking office. As the KOSPI strengthens and Korean entertainment companies gain global momentum, trust and transparency are more important than ever. HYBE—and the broader K-entertainment industry—now finds itself at a crossroads. Maintaining ethical business practices and market integrity will be essential for sustaining both domestic and international investor confidence.  XXXXXX engagements  **Related Topics** [ipo](/topic/ipo) [private equity](/topic/private-equity) [united states dollar](/topic/united-states-dollar) [$290m](/topic/$290m) [south korean won](/topic/south-korean-won) [coins entertainment](/topic/coins-entertainment) [Post Link](https://x.com/AsianEAC/status/1940646337500033337)
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Asian Entertainment And Culture @AsianEAC on x 7174 followers
Created: 2025-07-03 05:38:36 UTC
TL;DR HYBE was raided by police after prosecutors twice rejected warrants. The investigation targets Chairman Bang Si-hyuk, who allegedly received ₩400 billion KRW (~$290M USD) through a secret profit-sharing deal with private equity funds during HYBE's IPO.
The deal wasn’t disclosed publicly, raising suspicions of unfair trading or even embezzlement. While HYBE claims it was a legal contract, authorities are digging deeper. Meanwhile, Korea’s financial regulators and prosecutors are now involved, and the case could have broader implications for investor trust in K-pop’s corporate world.
===
Here’s a revised and polished version of your text with improved English, corrected names and terminology, and a more professional tone for clarity and flow:
Police Rejects Warrant Twice—Finally Conducts Search and Seizure of HYBE
The Seoul Metropolitan Police Agency's Financial Crimes Investigation Unit has officially conducted a search and seizure of HYBE, South Korea’s top entertainment company, home to BTS, NewJeans, TOMORROW X TOGETHER, BOYNEXTDOOR, and LE SSERAFIM—all of whom are reportedly preparing for full-group comebacks next spring.
This move came after two previously rejected search warrant requests by prosecutors, which had significantly delayed the investigation. Internally, police expressed frustration, with reports stating that they found it “difficult to understand” the reasons behind the rejections. On the third request, however, the prosecution granted approval—possibly influenced by pressure, as the Financial Supervisory Service (FSS) had already launched a separate investigation into HYBE.
Bang Si-hyuk Under Investigation
At the center of the investigation is Bang Si-hyuk, founder and chairman of HYBE. He is suspected of violating the Capital Market Act through fraudulent and unfair trading practices.
In short: Bang is alleged to have received ₩400 billion KRW (approx. $XXX million USD) in personal profit tied to HYBE’s IPO. The central legal question is whether this sum was part of a legitimate private contract, as HYBE claims, or an unfair transaction, as the police suspect.
Background: HYBE’s IPO and the Earn-Out Controversy
On October 15, 2020, HYBE (then known as Big Hit Entertainment) went public on the KOSPI stock exchange. The IPO made headlines, with the company’s market cap exceeding ₩8 trillion KRW on the first day—surpassing the combined value of SM, JYP, and YG at the time.
The stock’s initial offering price was ₩135,000 KRW, skyrocketing to ₩350,000 KRW before sharply falling. It took nearly a year for the price to recover to its peak. The major early sellers? Private equity firms like STIC Investments, Easton Equity Partners, and New Main Equity, who had acquired stakes in HYBE prior to its IPO and sold them shortly afterward for enormous profits.
The Secret Contract
These private equity firms reportedly entered into an earn-out agreement with Bang Si-hyuk prior to HYBE's listing. Under this deal, Bang would receive XX% of their investment profits once HYBE went public. This contract was not disclosed in the company’s securities filings, meaning only the involved parties were aware.
HYBE has maintained that this was a legally sound private agreement backed by external legal counsel. However, police question whether it constituted an unfair and undisclosed transaction, particularly since it significantly benefited Bang while regular investors were left unaware. Timing of Investment Raises Questions
The timing of the investments is also under scrutiny. For example:
STIC Investments entered in 2018, acquiring a XXXX% stake in Big Hit and exiting by 2021.
Easton PE shut down in December 2021 after cashing out.
New Main Equity was founded in October 2019—just a year before the IPO.
Adding to the mystery, in 2019 HYBE reportedly told shareholders, “We have no plans to go public.” If true, early shareholders may have sold their stakes based on that guidance. LB Investment, for instance, sold its shares to STIC and Easton PE. Notably, former HYBE CIO Kim Joong-dong played a key role in this transfer after joining Easton PE.
Retail investors—unaware of the XX% profit-sharing agreement—may have interpreted the post-IPO stock crash as a failed investment, not knowing that insiders had already cashed out. Additionally, these private equity firms were exempt from “lock-up” restrictions, allowing them to sell shares immediately after the IPO.
Could It Be Classified as Embezzlement?
During the warrant rejection phase, legal experts debated whether the charge should be "embezzlement" instead of a Capital Markets Act violation. Under Article 357, Paragraph X of the Korean Criminal Act, a person who handles another’s business and receives money or property in violation of their duties after an illicit request could be charged with embezzlement. In plain terms: Bang is suspected of personally profiting from HYBE’s IPO process while handling corporate affairs—potentially misusing his fiduciary role. However, proving such illegal conduct (e.g., illicit requests) is legally complex and would require strong evidence. Latest Developments
The Financial Supervisory Service (FSS) reportedly summoned Bang Si-hyuk for questioning at the end of last month.
After the FSS completes its investigation, it is expected to hand the case over to the Seoul Southern District Prosecutors' Office, which specializes in financial crimes.
In a separate case, the same prosecutors' office raided HYBE in May, investigating a former HYBE executive for insider trading using non-public information.
With multiple agencies involved, coordination between the police, prosecutors, and the FSS is now critical as the case accelerates.
Broader Implications
President Lee Jae-myung has emphasized the importance of fair capital markets and investor protection since taking office. As the KOSPI strengthens and Korean entertainment companies gain global momentum, trust and transparency are more important than ever.
HYBE—and the broader K-entertainment industry—now finds itself at a crossroads. Maintaining ethical business practices and market integrity will be essential for sustaining both domestic and international investor confidence.
XXXXXX engagements
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