Prosecutors raid HYBE headquarters amid insider trading investigation

South Korean prosecutors have recently conducted a search and seizure operation at the headquarters of entertainment giant HYBE, according to legal sources on May 29.

The Seoul Southern District Prosecutors’ Office is investigating a HYBE executive, identified only as Mr. A, on suspicion of earning illicit profits by using undisclosed information. 

Authorities believe Mr. A purchased shares of YG Plus in early 2021 after learning in advance that HYBE (then Big Hit Entertainment) planned to invest in the company. He is alleged to have made approximately 240 million KRW (around $175,000) in profit from the transaction.

Separately, the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency also applied for a search warrant on May 28 to investigate HYBE. Police are currently looking into allegations of fraudulent trading involving HYBE’s chairman, Bang Si Hyuk.

Chairman Bang is accused of misleading shareholders in late 2019 by claiming there were no plans for a public listing, only to proceed with the company's IPO shortly afterward.

South Korea’s Financial Supervisory Service (FSS) has also launched a review of the case, adding to the mounting scrutiny facing the K-pop powerhouse.

SEE ALSO: Court freezes Bang Si Hyuk's 100 million USD assets in HYBE Labels ahead of his indictment