First Official Statement Issued via Internal Email
Bang Sihyuk, Chairman of HYBE, who is under suspicion of "fraudulent unfair trading" during the company's initial public offering (IPO) process, issued his first official statement on August 6. Currently staying overseas, Chairman Bang apologized to company members and stated that he would return to Korea as soon as possible to cooperate with the authorities' investigation.
In an email sent to HYBE employees that day, Chairman Bang explained, "Due to the music production work for artists preparing for their comebacks and the company's business expansion for the future, I have inevitably spent extended periods abroad in recent years." He added, "I will put aside urgent projects and business meetings for now and return to Korea as soon as possible to prioritize participating in the authorities' investigation procedures."
He continued, "During the previous investigation by the financial authorities, I already provided a detailed explanation of the circumstances at the time of the IPO, and I will sincerely cooperate with future investigations to once again provide a thorough explanation." He added, "I hope that the facts will be clarified through this process, and I will humbly await the authorities' judgment."
Chairman Bang stated, "I cannot allow my personal issue to continue to burden the company and the industry." He continued, "As the founder and chairman of HYBE, I feel a deep sense of responsibility for the company and my name being mentioned repeatedly in recent negative news, and I sincerely apologize to all members."
He said, "I founded the company with a dream of advancing the music industry, and I have always prided myself on doing my best to remain upright throughout the process. However, I humbly reflect on the possibility that my confidence may sometimes have appeared as arrogance." He added, "I am also re-examining whether there were any shortcomings or mistakes I overlooked or failed to address during the company's growth."
Chairman Bang explained, "Because every statement must be made with caution while the authorities' investigation is ongoing, I have inevitably been careful about making any public remarks." He added, "However, the past several months, when I was unable to respond proactively because of this, have been personally distressing." He also confessed, "I have felt deeply sorry for the possibility that creators, employees, and artists might suffer direct or indirect harm as a result."
He emphasized, "I will do my utmost to explain the situation and resolve it so that my personal issue does not become an obstacle to the talents, capabilities, and spirit of challenge of our members." He added, "I will not forget that my role is to ensure that you can focus solely on creation and business." He also stated, "I will continue to reflect and not lose my original commitment to devote myself to the development of music and the industry."
This is the first time Chairman Bang has made a public statement since the financial authorities and investigative agencies began a full-scale investigation. Chairman Bang is accused of informing existing investors in 2019, before HYBE's IPO, that there were no plans for an IPO, and then inducing them to sell their shares to a special purpose company (SPC) established by a private equity fund associated with him. This constitutes "fraudulent unfair trading" under the Capital Markets Act.
The financial authorities determined that, even though HYBE was already in the early stages of the listing process at the time, such as applying for a designated auditor, Chairman Bang concealed this information and induced investors to transfer their shares. HYBE subsequently succeeded in going public, and Chairman Bang is estimated to have received about 30% of the capital gains from the private equity fund. The authorities believe he obtained approximately 190 billion won in unjust profits.
On July 24, the investigative authorities conducted a search and seizure of HYBE's headquarters in Yongsan, Seoul, and have since continued searches of related institutions such as the Korea Exchange. The Securities and Futures Commission filed a complaint against Chairman Bang with the prosecution last month, and the Financial Supervisory Service's special judicial police are conducting the investigation under the direction of the Seoul Southern District Prosecutors' Office. The National Tax Service has also launched a separate tax investigation into HYBE. As of now, no official schedule has been set for Chairman Bang's formal questioning.
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