HYBE is facing deeper legal trouble as an alleged confidential document surfaced online, revealing suspected fund misuse in a major brand deal involving girl group NewJeans.On July 29, 2025 (KST), South Korea’s National Tax Service’s Investigation Bureau 4 entered HYBE’s Yongsan office without prior notice. The label is among 27 companies being investigated over alleged tax evasion and stock irregularities.As reported by K-media Instiz on the same day that a legal document emerged online, a KRW 10 billion (around USD 7.19M) collaboration between NewJeans and Krafton’s PUBG: Battlegrounds.The leaked file shows that nearly KRW 4.1 billion (approx. USD 2.95M) from that contract was redirected internally by its subsidiary. After the discrepancy was flagged, the multinational conglomerate reportedly corrected the report and returned KRW 1.6 billion (approx. USD1.15M).The figures match earlier reports that accused HYBE of moving ADOR’s earnings to inflate HYBE IM’s revenue. Users on online forums claim the original misused amount was KRW 500 million (around USD360K), but it allegedly grew after ADOR’s CEO, Min Hee-jin, exited her role.HYBE to be investigated for domestic & international tax evasionAs reported by Tax and Finance News, HYBE is now facing a wider tax probe that stretches beyond local grounds. Authorities are reportedly digging into suspected offshore tax avoidance, questionable transfer pricing practices, and how the company has managed tax matters linked to its artists.The National Tax Service (NTS) hinted that the audit might expand past typical corporate checks. The scope could include income routing through overseas branches in regions like the U.S., Japan, and Southeast Asia.Officials are also looking at whether HYBE followed proper tax procedures involving internal transactions with related entities. Alongside this, investigators are expected to examine whether artist earnings were reported and taxed correctly.Tax gaps or irregularities in those filings may fall under review as part of the ongoing inspection. So far, officials have declined to confirm any names or companies under investigation, citing policy restrictions, saying,"We cannot disclose specific information about the audit case. We ask for your understanding.”However, they noted the inquiry may go deeper if additional concerns surface during the audit. The National Tax Service has opened audits into 27 parties (both businesses and individuals) linked to illegal stock activities that reportedly exploited small investors.According to officials, nine of them are suspected of inflating stock prices through fake announcements, then dumping shares for huge profits. Another eight are accused of taking over healthy firms using bonds, then draining company assets while claiming the money was for investments.Ten more cases involve majority shareholders who allegedly used their position to sideline minority investors and redirect company value for personal benefit. To track the money trail, the tax agency is using digital tools, like document recovery, financial tracking, and electronic verification.They’re also teaming up with law enforcement, the Financial Intelligence Unit, and checking foreign exchange data. The NTS says it’s moving to protect regular investors and hold market abusers accountable. If wrongdoing is confirmed, legal action and tax penalties may follow.On July 16, the Securities and Futures Commission filed a complaint against HYBE Chairman Bang Si-hyuk and ex-executives for allegedly violating the Capital Markets Act. Bang is accused of misleading pre-IPO shareholders to buy shares at low prices, then profiting after the company's IPO.