At a regular press briefing on October 20, a representative from the Seoul Metropolitan Police Agency’s Major Crimes Investigation Unit stated, “As reported, additional questioning has been conducted, and we are thoroughly analyzing the collected materials and testimonies,” adding, “We are also carrying out a legal review.” Documents have also been submitted to the court, and an arrest warrant will be issued soon if the court approves.

However, police added that there has been no significant progress in the investigation since Bang’s two previous rounds of questioning.

Bang is currently under investigation for allegedly deceiving HYBE investors in 2019 by claiming the company had no plans to go public, while secretly arranging to sell shares to a private equity fund, which is a violation of the Capital Markets Act. When the company later proceeded with its IPO, the fund sold its shares and reportedly shared around 190 billion KRW (132.6 million USD) in profits with Bang, as previously agreed.

Attorney Jung Tae Won of LKB & Partners explained, “The key issue in Chairman Bang’s case is alleged violation of Article 178 of the Capital Markets Act, which prohibits fraudulent and unfair trading. The problem lies in the fact that he denied any listing plans, then sold shares and profited after the listing took place.”

Police, who began their investigation late last year, have raided HYBE’s headquarters and the Korea Exchange in Yeongdeungpo District, Seoul. Bang was questioned twice last month, and after returning from a business trip to the U.S. on August 11, he was placed under a travel ban.

HYBE stated, “We complied with all relevant laws and regulations during the listing process and will fully cooperate with the investigation.”

The police’s latest remarks suggest the investigation has reached a stage of careful legal deliberation and evidence review.

Attorney Jung added, “When police say they are conducting a ‘legal review,’ it doesn’t simply mean examining the law; it means determining, based on the evidence and testimony gathered, whether a crime has actually been committed. The evidence may be ambiguous, so further review could be necessary. The key issues are whether there was deception of investors and intent, as the outcome of this case could significantly impact trust in the capital market.”

He continued, “Police may seek an arrest warrant to secure custody, while the defense could argue there’s no risk of evidence destruction or fight and request an investigation without detention. It could turn into a battle between offense and defense, but given the police’s current stance, the likelihood of a warrant request appears high.”

Attorney Noh Jong Un of JonJae Law Firm commented, “Fraudulent trading under the Capital Markets Act is often referred to as a ‘rebellion against the capital market’ because it undermines its very foundation and carries heavy penalties. Therefore, the police’s mention of a ‘legal review’ likely means they are carefully and comprehensively assessing whether to proceed with an arrest and whether the charges can be substantiated.”