Bang Si Hyuk is facing an investigation for alleged misconduct, alleging that HYBE’s founder earned billions of won from the multilabel’s public offering in 2020 by making deals with three major shareholders.

According to a report by Korea Economic Daily, sources in the financial and investment banking industry confirmed that Bang Si Hyuk obtained 400 billion won, or $287 million, from HYBE’s initial public offering through the deal signed by its private shareholders with local private equity fund companies.

These fund organizations were named STIC Investments Inc., Estonian Equity Partners and New Main Equity. According to the claims, the agreement stipulates that PEFs with HYBE stakes acquired after the multilabel’s investment in 2018 and 2019 are required to share 30% of profits with Bang Si Hyuk should HYBE go public.

STIC Investments held a 12.2% stake in HYBE, then known as Big Hit Entertainment.

As for Estone and New Main Equity, the two companies held a combined share of 11.4%. It was reportedly agreed that if HYBE did not go public before the allotted time, the shares and interests of the PEFs would have to be repurchased by Bang Si Hyuk.

Market analysts also shared that it is “unusual” for a company’s largest shareholder to profit from a stake by entering into a shareholder agreement before the company authorizes an IPO.

Financial Supervisory Service officials also shared that no files containing the “Bang Si Hyuk-PEFs” shareholder agreement before HYBE’s IPO can be withdrawn.