Hongdae club linked to Seungri suspected of evading taxes, is reportedly owned by YG & his brother

As if the mess with Burning Sun and then Seungri’s texts weren’t enough, now another club called Love Signal in Hongdae that Seungri was supposedly running has been looped into the mess, and this time it comes with a connection back to YG himself.

The Love Signal club was called Club X from December 2017 to August 2018, and Seungri promoted it on social media as a place he ran.

The report explains that club Love Signal, located in the neighborhood of Seogyo it Mapo District in Seoul, is the same club as Club X, which was run from December 2017 to August 2018. The day Club X opened, Seungri posted on his Instagram, “Club X, a club I manage myself, has opened in the basement across the street from Samgeori Pocha in Hongdae. Come ^_^” Kukinews reported that the bracelets handed out at the entrance of Love Signal have Club X’s logo and that a source from Love Signal acknowledged the connection between the two clubs, suggesting that Seungri is also tied to Love Signal.

The problem comes in the form of the club basically using a different registration in order to avoid being taxed at a higher/correct rate.

Love Signal is registered as a regular restaurant, when in reality, it is an adult entertainment establishment according to the laws of Mapo District. In 2015, Mapo District established a new regulation regarding regular restaurants that allow guests to dance. It is a regulation meant to help clubs in the Hongdae area thrive by allowing them to register their businesses as regular restaurants. The regulation states that in regular restaurants where guests are allowed to dance, guests can only dance in the areas between tables and chairs. It is a violation of the regulation to have a separate stage for guests to dance. As of December 2018, there are 43 regular restaurants in Mapo District where guests are allowed to dance, and Love Signal is one of them. Kukinews found on February 28 that Love Signal has structures resembling a stage. The stage has several poles installed on it as well, and they confirmed that night that guests were indeed dancing on the stage.

Indeed, it was hard to argue with the pictures.

The part where the government might care is that the club is basically evading proper taxes.

Regular restaurants are required to pay 10 percent in value-added taxes, while adult entertainment establishments have to pay an additional 10 percent special consumption tax and 3 percent educational taxes. For example, if a business gathers 10 million won (approximately $8,855) in profits, it would pay 1 million won (approximately $885) in taxes as a regular restaurant and 2.3 million won (approximately $2,036) as an adult entertainment establishment. Therefore, registering a club as a regular restaurant is a way to bend the law and evade the heavy tax. Whether the act is legal or not depends on the existence of a separate stage for dancing inside the club.

This seem like less than ideal news for the owners of the club because god knows the government will let people get away with a lot except for messing with their money.

Speaking of the owners of the club, perhaps the most important thing is that this links back to YG himself, as YG and his brother Yang Min Suk own the company that owned the club.

Though Love Signal appeared to be tied to Seungri at first, Kukinews found that on official documents, the owner of Love Signal is corporation “A.” As of December 31, 2016, YG Entertainment CEO, Yang Hyun Suk, owned 70 percent of the stocks of corporation “A,” while his brother and president of YG Entertainment, Yang Min Suk, owned the remaining 30 percent. This indicates that Love Signal may be a business jointly owned by Yang Hyun Suk and Yang Min Suk if they still hold the same amount of stocks in corporation “A.”

When questioned, the company was evasive and so was YGE, while the police were rather unhelpful.

When questioned about this news, corporation “A” responded, “We have nothing to say on our part. If the Mapo District Office says it’s illegal, then it’s illegal. Call the Mapo District Office and confirm the facts.” Meanwhile, YG Entertainment stated, “This is not something we can figure out soon. We are not sure when we will be able to give a response.” Mapo District Office told Kukinews, “We do have separate investigations for regular restaurants that allow guests to dance. It is possible that we issued a correction order but the corrections were not made by the business.”

In a way, I feel like as a standalone this isn’t a big deal and is probably common. Yeah, tax evasion sounds bad, but this is more on the minor side compared to everything else that’s going on.

That said, the context that surrounds this sorta makes it relevant as it connects a business of a YG artist to YG and the company themselves. Previously, the degree of separation between the two was cited by authorities as a reason they weren’t monitoring or looking into YG and YGE, and that may not exist now. Obviously given how shady everything has been, it would probably be the right thing to use this to at least probe a bit, but given how police have handled things so far, I’m skeptical much will happen.

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