Korea’s National Tax Service has reportedly launched an investigation into YG Entertainment over suspicions of tax evasion, which can be traced back to the reporting on clubs linked to YG evading being taxed at proper rates.
National Tax Service sent investigators to YG Entertainment’s headquarters in Mapo District, Seoul to retrieve tax-related documents. It has been reported that almost 100 investigators were present on scene. YG Entertainment previously received a regular tax investigation, which is normally held every five years, in 2016. This new investigation is a special tax investigation led by the 4th Investigation Bureau of the National Tax Service Seoul Regional Office. This investigation is not limited to the finance-related departments but involves a wide range of departments such as performance and marketing.
Like I’ve been saying, the money.
They claim to have secured necessary documents, but who knows what they’ll find at this point. Because although I sorta dismissed it at the time, those reports about YGE hiring a company to dispose of documents and do a server inspection after the Burning Sun mess (though it was explained) have awful optics now.
Additionally, YG’s younger brother and YGE CEO Yang Min Suk is facing a vote of no-confidence from shareholders.
YG Entertainment shareholders will vote on whether to replace CEO Yang Min-suk, the younger brother of the agency’s founder and chief producer Yang Hyun-suk, Friday amid the snowballing sex bribery and corruption scandal surrounding former Big Bang member Seungri. Since the agency’s listing on the local bourse in 2011, the younger Yang has led its sprawling business while his older brother and largest shareholder stepped away from day-to-day operations to focus on his producer role. Founder Yang and the CEO own 16.12 percent and 3.31 percent stake in the company, respectively. The shareholders meeting comes as the company’s share price has tumbled almost 30 percent since police investigations started last month over allegations that Seungri had offered prostitution to potential business partners from two years ago.
Ahead of the gathering of shareholders this week, keen attention is now being paid to key institutional investors whose votes will decide the fate of one of the nation’s largest entertainment agencies. Investors who are obliged to disclose their stake ownership of more than 5 percent include Global World Music Investment at 9.53 percent, Naver at 8.5 percent, Shanghai Fengying Business Consultant Partnership at 7.54 percent and the National Pension Service with 6.06 percent.
Things are spiraling to say the least.
YGE has responded, saying they’ll cooperate, as if they have a choice.
On March 20, the company commented, “We will cooperate diligently with the tax investigation from the National Tax Service.”