Prosecutors in South Korea have rejected the police's request to arrest K-pop mogul Bang Si-hyuk, the man who created supergroup BTS, on charges of fraudulent trading.
There are "insufficient grounds" to warrant an arrest at this stage, prosecutors said on Friday, and called for further investigation.
Police accuse Bang of misleading his investors in 2019 by claiming a public listing for his conglomerate Hybe was not likely, while secretly preparing for it.
Hybe, now worth $7.3bn, debuted on the South Korean bourse in October 2020, and police allege Bang pocketed some 200bn won ($136m; £101m) as a result. He denies the charges.
The case against Bang is long-running and has seen raids at Hybe's headquarters, some of his assets frozen and calls for him to step down as the company's chairman.
The 53-year-old has maintained that his actions were above board. He has been banned from travelling abroad since August while the investigation is carried out.
The request for a warrant comes weeks after BTS – Hybe's crown jewel and the reason for its immense success – kicked off a comeback world tour following a hiatus of nearly four years.
Industry watchers estimate that Hybe stands to make more than $1bn from the sold-out tour, which will take the group to 34 cities across the world.
The company's shares hit a four-year high when BTS announced their world tour in January, adding over 1 trillion won to its market value.
Bang, who was instrumental in taking the group global, said in a recent interview with Billboard that BTS had become like a "tourist attraction... widely recognised and embraced by the global public".
Under South Korean law, those convicted of making 5bn won or more in illicit proceeds face between five years in jail and a life sentence.
Bang's passion for music started at a young age. He was part of a band in middle school that performed songs he wrote, while a budding songwriting career began in his university years.
In 1997, Bang co-founded JYP Entertainment with singer-songwriter Park Jin-young. Like Hybe, JYP is today one of the "big four" K-pop conglomerates.
One of Bang's and Park's early successes was first-generation group g.o.d, which earned them a reputation as hit composers and gave Bang the nickname "Hitman Bang".
In 2005, Bang left JYP to start his own venture, Big Hit Entertainment, known today as Hybe. He began creating a seven-member boy group in 2010, but it took a few years for BTS, as we know it today, to take shape.
The group was initially conceived as a hip-hop crew, but Bang decided to adopt a "K-pop idol model" after considering "the business context", he told Time in an interview in 2019.
In the years since their launch, BTS has gone on to become among the most successful pop groups in history, including being the first Korean act to top Billboard's Hot 100 and the first Asian group to surpass five billion streams on Spotify.
Shares in Big Hit Entertainment debuted in October 2020 at $235 a piece, more than doubling the initial public offering price of $110.
In 2019, Bloomberg put Bang's net worth at about $770m – this has since skyrocketed to more than $2bn. As of last month, Bang held more than 13 million Hybe shares, valued at nearly 5 trillion won, according to the Korea CXO Research Institute, a Seoul-based corporate analysis firm.
In December 2024, South Korea's financial regulator launched an investigation into allegations that Bang entered into profit-sharing agreements with private equity funds ahead of Hybe's market debut, without proper public disclosure.
Police allege that Bang had deceived existing investors and venture capital firms into thinking that there were no plans for a public listing, inducing them instead to sell their Hybe shares to a private equity fund he is alleged to have ties to.
Bang is suspected of then getting a 30% cut of the illicit proceeds, amounting to about 200 billion won, when the private equity fund sold its stake after Hybe went public.
Hybe has denied wrongdoing, arguing that it had provided a copy of the agreement in question to the underwriters for its initial public offering who advised that disclosure was not necessary.
Bang has also denied wrongdoing throughout the investigations.
On Tuesday, his lawyers said they "regret" the police's request for an arrest warrant. "We will continue to co-operate with all legal procedures and make every effort to clearly explain our position," they said in a statement.
Hybe shares fell 2.3% at the closing bell on Tuesday while the benchmark Kospi rose 2.7%. Stocks in the other big three K-pop conglomerates also fell.
The police can re-apply for a detention warrant at a later stage, after collecting further evidence. They could also indict Bang without first detaining him, but legal experts tell the BBC police may prefer to take him into custody to prevent him from fleeing or tampering with evidence.
Moon Eugene, a judge-turned-lawyer in South Korea, believes the case could "cast doubt on South Korea's moral standing" should Bang be found guilty. He is after all "at the very heart of K-pop", she says.
Stock manipulation is a persistent issue in South Korea, which authorities have recently vowed to crack down on.
While those involved in illicit trading practices were previously subject to fairly lenient penalties like warnings and administrative fines, President Lee Jae Myung has called for harsher sanctions.
In August, a new team comprising officials from the national financial regulators and the Korean stock exchange was set up to investigate illegal stock trading activities.
The team abides by a "one strike and you're out" policy, where accounts found to be used in illegal activities will be promptly suspended. Perpetrators face fines of up to twice the value of their illicit gains.
Other high-profile figures who had previously been indicted on separate cases of stock rigging include Samsung chairman Lee Jae-yong, Kakao founder Kim Beom-su, and former first lady Kim Keon-hee. They were eventually acquitted.
Additional reporting by Leehyun Choi in Seoul
