HYBE, the K-pop entertainment giant led by chairman Bang Si Hyuk, is facing its most serious crisis since its founding, as it becomes the target of a special tax investigation by the Seoul Regional Tax Office. This development comes in parallel with an ongoing police probe into allegations that HYBE misled existing investors to secure unfair profits ahead of a major listing, in violation of the Capital Markets Act.
On July 29, the National Tax Service (NTS) announced the launch of a special audit targeting 27 entities suspected of tax evasion through unfair trading activities that disrupted the stock market. HYBE, which ranked first among entertainment companies in the K-Brand Index, has been confirmed as one of the companies under investigation.
According to sources in the entertainment industry and related authorities, the '4th Bureau of Investigation' at the Seoul Regional Tax Office dispatched investigators without prior notice to HYBE’s headquarters in Yongsan, Seoul, on Monday morning. Officials are currently collecting documents and records deemed relevant for the audit.
This marks the first tax probe into HYBE in three years. In June 2022, the company was subject to a regular audit by the 1st Bureau of the Seoul Regional Tax Office, which resulted in tens of billions of won in additional tax assessments.
The newly launched special investigation includes not only HYBE but also a wide range of companies and individuals suspected of manipulating the stock market for personal gain over the past two years.
The 27 targets include:
Nine companies accused of making false public disclosures to manipulate share prices,
Eight “corporate raiders” who acquired firms, liquidated key assets, and subsequently delisted them,
Ten controlling shareholders suspected of privatizing listed companies for personal benefit.
HYBE is also under criminal investigation by special judicial police officers at the Financial Supervisory Service, under the supervision of prosecutors and the police. This dual-track investigation gained momentum after the Securities and Futures Commission filed a complaint with prosecutors on July 16 against Bang Si Hyuk and three former executives of HYBE, citing fraudulent and unfair trading practices under the Capital Markets Act.
Police initially launched their investigation in December 2023, but faced delays after two search warrant requests were denied. A warrant was finally granted on the third attempt.
As both tax and criminal authorities intensify their scrutiny, HYBE now finds itself at the center of a multifaceted legal and financial storm that could shape the future of one of South Korea’s most influential entertainment firms.
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