By Kyu-seok Shim and Heekyong Yang
SEOUL, April 21 (Reuters) – South Korean police have requested a detention warrant for Bang Si-hyuk, the chairman of Kpop agency HYBE, over alleged illegal trading tied to the company’s initial public offering.
The Seoul Metropolitan Police Agency said Bang is suspected of violating capital market laws by misleading early investors ahead of HYBE’s listing and steering them to sell shares to a private equity fund linked to his associates.
Police allege that after HYBE went public the fund sold its stake and Bang received about 30% of the profits under a prior shareholder agreement, earning roughly 190 billion won ($129.1 million) in illicit gains.
Bang has previously denied any wrongdoing.
A statement from HYBE citing Bang’s legal counsel said on Tuesday: “We regret that a detention warrant has been sought despite our full and consistent cooperation with the investigation over an extended period.
“We will continue to cooperate with all legal procedures and make every effort to clearly explain our position,” it said.
Bang is also the founder of HYBE, the music powerhouse behind global Kpop supergroup BTS.
HYBE shares reversed course after the report and were down 2.4% by the market close, compared with a 2.7% rise in South Korea’s benchmark KOSPI.
The National Police Agency confirmed that the U.S. embassy in Seoul recently sent a letter asking authorities to allow Bang to travel to the United States, despite a travel ban imposed during the investigation.
According to police, the letter sought a temporary suspension of the ban, citing plans for Bang and other senior executives to attend an event to mark U.S. Independence Day and hold talks related to the ongoing BTS global tour.
The U.S. embassy in Seoul said it did not have anything to add on that matter.
Bang has been barred from leaving South Korea since August last year.
The warrant request will be reviewed by the Seoul Southern District Prosecutors’ Office, and if prosecutors seek a detention warrant, a court typically holds a hearing within two to three days to decide whether to order Bang’s arrest, according to local reports.
($1 = 1471.9 won)
(Reporting by Kyu-seok Shim, Heekyong Yang and Jack KimEditing by Ed Davies)
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