Lawyer says Daesung knew illegal business was operating out of building before he bought it, tenant contract stipulation revealed

Following reports that Daesung of Big Bang owned buildings that contained illegal businesses of the adult entertainment variety, there was a bit of a back-and-forth over exactly how much he or his people knew about it. For some he had plausible deniability, for others it was obvious that a landlord at least would’ve been told what was happening in his own property.

Now a lawyer has come forward to support the latter position, saying that he definitely knew the illegal businesses were there because he was told that before buying the building.

The lawyer, identified as “A”, claims he took part in a meeting with Daesung at a law firm 2 months before he purchased the building. The alleged meeting had multiple lawyers, a real estate agent and a bank manager present. There, Daesung reportedly asked about the responsibilities of the building owner if illegal entertainment was found on its premises.
“On September 20, 2017, Daesung visited a law firm to find out if the building owner could be held responsible if illegal adult entertainment was found on its premises. Before purchasing the building, he brought a real estate agent and the branch manager of a bank to receive consultation at the law firm. There, he asked about the illegal entertainment laws, such as prostitution.” — Lawyer A
According to Lawyer A, Daesung already knew for sure that prostitution took place at the building he was planning to buy. He asked if it was possible to kick the tenants out but was told it was impossible to ask them to leave unilaterally.
“At the time of the meeting, Daesung already knew exactly where the illegal entertainment was taking place in his [prospective] building. He knew for certain that there was an illegal store. He also asked if it was possible to kick out a tenant that was committing illegal activities. The lawyer responded that the landlord can’t ask the tenant to leave unilaterally.” — Lawyer A

Basically, he says Daesung was warned about potential consequences and went ahead with the purchase anyway.

The legal office reportedly advised Daesung that the building owner could be prosecuted for soliciting prostitution if they were discovered to have turned a blind eye. The Special Act Of Prostitution claims that anyone who provides the location for prostitution to take place can be prosecuted. Despite the alleged consultation, Daesung purchased the building in Gangnam for 31 billion won (~$26 million USD) 2 months after their meeting.
“I understand that the documents were written as conservatively as possible. He knew that prostitution took place at the building, but he still purchased it. The law firm told him that if he continued to manage the building while turning a blind eye to the illegal activities, he can be prosecuted for soliciting prostitution. Even after the legal consultation, Daesung purchased the building 2 months later.” — Lawyer A

Perhaps due to this advice, it was reported that he did make tenants sign contracts which gave him the ability to evict them if they were caught doing illegal business.

In the July 30 report, “News A” reported that they had exclusively acquired a copy of the contract that Daesung had signed with one of the businesses in the building before he took over ownership of the building. The tenant signed the contract in November 2017 at Daesung’s request. The contract stipulates that if the tenant is found guilty of an illegal act or if they are found operating a business beyond the limits of an ordinary restaurant, then the contract will immediately be terminated. A source from one of the entertainment businesses in the building said that he had signed this contract and claimed that these conditions were emphasized in the contract because Daesung was already aware of the illegal activity in the building. A legal representative, who had been present at the signing of the contract, confirmed that Daesung had emphasized those two conditions of the contract and said, “It was unusual to some degree.”

Makes sense then that after the report, the illegal businesses in his building were shut down suddenly. Despite this, it was reported subsequently that examined and cleared by police earlier this year.

Meanwhile, the tax evasion issue is still most likely to get him into trouble legally.

The Gangnam District Office, which is investigating the building, have stated that they could levy an additional tax of up to 1 billion won (about $850,000) against the building for operating adult entertainment businesses. The district office also stated that there could be further punishment if it is determined that the owner of the building knew that there were adult entertainment businesses in the building and deliberately did not pay the correct taxes required for those businesses.

All in all, things just slowly appear to be chipping away at the believability that Daesung knew nothing about what was going on in his building. Personally it’s harder for me to believe him not knowing simply because this kind of stuff is so commonplace that it couldn’t be surprising, much like … say, getting involved in nightclub ownership ending up being a mess.


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