South Korea’s Tax Investigation into HYBE Led by “Business Grim Reaper”

27 entities is believed to be around ₩1 trillion KRW (approximately $770 million USD).

In a statement, the NTS emphasized the detrimental effects of unfair practices in the stock market on both domestic and international investors’ confidence in the Korean equity market. The agency highlighted that the erosion of trust in the market, often referred to as the “Korea Discount,” has contributed to the country’s economic slowdown. The NTS vowed to conduct a thorough investigation into tax evasion associated with these market-disrupting activities.

As HYBE navigates the legal and public challenges stemming from the investigation, the entertainment industry and investors are closely monitoring the unfolding of this prominent case.

On July 29th, Field News disclosed that South Korea’s National Tax Service (NTS) initiated a specialized examination into 27 entities and individuals suspected of engaging in illicit financial activities through unauthorized stock transactions and tax evasion, with HYBE being one of the entities under scrutiny. Bang Si-hyuk, the chairman of HYBE, is currently under intense public scrutiny regarding the “₩400 billion shock” scandal linked to the alleged financial misconduct.

In an unexpected move, investigators from the Seoul Regional Tax Office’s 4th Bureau entered HYBE’s headquarters in Yongsan District, Seoul, to seize financial documents related to the case, indicating a resolute stance by authorities against market irregularities.

This investigation marks a recurrence of HYBE’s interaction with tax authorities, as the company previously underwent a routine audit in June 2022, during which it reportedly settled significant back tax payments.

The NTS outlined that the ongoing probe is part of a broader crackdown targeting various practices, including false disclosures for stock manipulation, hit-and-run corporate raiding tactics, and controlling shareholders exploiting their positions for personal gain through the privatization of publicly traded companies. The NTS estimates that the collective tax evasion among the 27 entities amounts to approximately ₩1 trillion KRW (equivalent to $770 million USD).

The NTS underscored the urgency of addressing unfair practices in the stock market to restore investor trust and alleviate the negative impact on the Korean equity market and economy. The agency reiterated its commitment to investigating tax evasion associated with these disruptive market behaviors.

With HYBE at the center of this high-profile investigation, stakeholders and observers in the entertainment industry and financial markets are closely monitoring the developments as the case progresses.