Police Raid Hive's Headquarters Amid Allegations of Stock Fraud

On July 24, police conducted a search of the headquarters of the entertainment company Hive (하이브) located in Yongsan, Seoul. The chairman, Bang Si-hyuk (방시혁), is under investigation for allegedly deceiving investors by claiming there were no plans for the company to go public, which led to the sale of shares and a profit of approximately 200 billion KRW. This marks the first major investigation into high-profile individuals since President Lee Jae-myung (이재명) took office, emphasizing a strong stance against market manipulation.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police began the raid at 9 AM and continued until late evening. This is the first time police have searched Hive's offices. Reports indicate that prior to Hive's initial public offering (IPO) in 2020, Bang entered into an agreement with a private equity fund established by close associates, allowing him to receive 30% of the profits from the sale of shares. However, he misled investors into believing there were no plans for an IPO, encouraging them to sell their shares to the private equity fund at inflated prices. Trusting his statements, shareholders sold their stocks, and Bang reportedly received around 200 billion KRW from the profits after the IPO.

Recently, during an investigation by the Financial Supervisory Service, Bang claimed that these transactions were legally sound. However, the Securities and Futures Commission, under the Financial Services Commission, deemed it necessary to investigate Bang and filed a complaint with the prosecution on July 16. Following this, the police requested the case be transferred for further investigation.

Earlier this year, in April and May, the police had sought search warrants from the prosecution, but those requests were denied. A prosecution official stated that previous applications lacked sufficient details regarding the allegations, but the current request was deemed to have been adequately supplemented. President Lee had previously promised to impose severe penalties for stock manipulation, stating that anyone caught would face permanent expulsion from the market under a 'one-strike-out' policy.