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On May 13, 2025, Korea JoonAng Daily reported that HYBE’s head, Bang Si-hyuk, has been summoned to testify in a court case concerning alleged stock manipulation linked to SM Entertainment.
The Seoul Southern District Court issued the notice on May 8, 2023, requiring his presence on June 20 unless he provides a valid excuse to avoid it. This legal matter focuses on Kim Beom-soo, founder of Kakao, who is accused of violating the Capital Markets Act.
Prosecutors allege that in February 2023, Kim teamed up with One Asia Partners and others to inflate SM Entertainment’s stock price. The goal was to stop HYBE from acquiring the company by keeping the price above HYBE’s 120,000 KRW (~85 USD) offer.
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Bang and Kim allegedly met on February 14, 2023, to discuss the purchase of SM. Prosecutors claim Bang told Kim to back off from the takeover, but Kim ignored this and proceeded with his acquisition plan.
The court seeks Bang Si-hyuk’s testimony to clarify what transpired during their conversation and how it relates to the stock manipulation claims.
HYBE’s Bang Si-hyuk was probed by FSS for secret investor pacts last year
Last year, as reported by The Korea Herald, Bang Si-hyuk was investigated by the Financial Supervisory Service (FSS) over off-the-record deals with local investors made before and during HYBE’s 2020 stock launch. The outlet reported that these backdoor pacts earned him nearly 400 billion won.
In 2018, Bang reportedly struck deals with three firms (STIC, Estone Equity, and New Main Equity) that allowed them to bypass the usual waiting period before selling shares after HYBE went public.
According to Business Korea, the deal also provided Bang with a share, 30% of their earnings, if the stock launch was successful. If it wasn’t, he was obligated to repurchase their shares under a fallback rule. These firms sold close to 4.99% of HYBE’s equity immediately after the initial listing. That swift action was linked to HYBE’s share price crash.
The stock opened strong at KRW 270,000 (about $229) but quickly fell back to its listing price of KRW 140,000 within days. The Daily reported that STIC alone made nearly KRW 961 billion ($814 million) from an investment of just over KRW 100 billion. The other two firms also reported similar returns. Bang allegedly pocketed KRW 400 billion from the entire transaction.
Subsequently, HYBE came under the radar of South Korea’s financial regulator. The country’s main finance watchdog launched a probe to determine whether the company failed to disclose a private shareholder agreement before its 2020 IPO.
In a statement filed on November 29, HYBE denied any wrongdoing in its 2020 IPO, claiming the shareholder deal was shared with underwriters and legally reviewed. The 2018 agreement between Bang Si-hyuk and private equity firms included profit-sharing and a fallback clause, using Bang’s personal shares.
Although labeled private, parts of the deal were mentioned in the IPO prospectus. After the FSS launched a probe, HYBE’s stock fell 2.77% on December 2 and over 21% by year-end.
