South Korea's Financial Supervisory Service (FSS) is gearing up to seek a formal criminal probe into HYBE chairman Bang Si Hyuk on suspicions of engaging in fraudulent securities transactions, potentially leading to a life sentence under the Capital Markets Act. It is alleged that Bang Si Hyuk deceived existing investors of HYBE in 2019 by denying plans for an Initial Public Offering (IPO) while the company was actively preparing for one, which led investors to sell their shares to a private equity fund (PEF) linked to an associate of Bang Si Hyuk. These actions are believed to breach the Capital Markets Act as Bang Si Hyuk allegedly entered into undisclosed profit-sharing agreements with the PEF, securing around 400 billion KRW ($290 million) in return. The FSS is now expediting its investigation and is set to inform prosecutors swiftly. Additionally, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency is conducting a separate inquiry. HYBE has stated that all transactions were legally reviewed and carried out within the boundaries of the law, following initial media reports that sparked questions about misconduct related to the company's IPO. Financial experts are closely monitoring the case, highlighting the potential implications for investor confidence in capital markets if undisclosed profit-sharing arrangements between major shareholders and PEFs are tolerated. The investigation has revealed evidence suggesting that investors were misled while HYBE was actively gearing up for its IPO, prompting concerns about accountability and transparency in public markets moving forward.