South Korean police are seeking to arrest Bang Si-Hyuk, the chair of the agency behind the K-pop band BTS, as they expand an investigation into allegations that he illegally gained more than $100m (£74m) in an investor fraud scheme.

The Seoul metropolitan police agency confirmed it had asked prosecutors to request a court warrant for the arrest of Bang, the founder and chair of HYBE.

In a statement to the Associated Press, Bang’s legal team did not directly address the accusations but expressed regret that police were seeking his arrest “despite our full and consistent cooperation with the investigation over an extended period”.

“We will continue to cooperate with all legal procedures and make every effort to clearly explain our position,” the statement said.

Bang has been under investigation since November over allegations that he misled investors in 2019 by telling them HYBE had no plans to go public, inducing them to sell their shares to a private equity fund before the company proceeded with an initial public offering. Police believe the fund may have paid Bang about 200bn won ($136m) in a side deal that promised him 30% of post-IPO stock sale profits.

Bang, a music executive and producer who founded HYBE as Big Hit Entertainment in 2005, is widely seen as one of the most powerful figures in K-pop, overseeing some of the industry’s most popular acts, including Seventeen, Le Sserafim and Katseye in addition to BTS.

Bang’s legal troubles are a major public relations setback for HYBE, coming as BTS embarks on a global tour after a nearly four-year hiatus while its members did mandatory military service.

BTS performed in front of tens of thousands of international fans at a free comeback concert in Seoul last month and have also held several concerts in the South Korean city of Goyang and in Tokyo. The group is to kick off a series of US events with a concert in Tampa, Florida, later this month and will visit the UK in July.