After Yang Hyun Suk‘s brother Yang Min Suk stepped down as CEO of YG Entertainment, Hwang Bo Kyung stepped up to take over the role. She inherited quite a mess, and I was cynical about whether anything would change under her guidance given she was the company’s CFO during multiple tax evasion scandals. Well now it’s being reported that she and other executives were involved in insider trading.
Hwang acquired shares under the name of her subordinate manager ‘Kim’ and sent funds to ‘Kim’ to buy shares by having her husband’s friend hide his borrowed name. It was also found that the difference created by selling stocks was left in ‘Kim’s’ account and spent on construction costs and living expenses. A, a close aide to former CEO Yang Min-seok, also received shares in the name of his employee ‘Ha,’ and deposited the stock payment through ‘Ha’s’ account. A total of three YG employees owned company shares after being asked to trade under borrowed names, two of whom were aware of the possibility of capital gains as they were in charge of attracting investment at the time of listing. “Hwang, who was in charge of finance at the time, is now the CEO of YG Entertainment and ‘Kim’ is the finance director,” SBS 8 News said. At that time, ‘Kim’ said, “It was an audit to monitor the operation of the Korean private equity association.”
This was revealed as part of the Burning Sun investigation into the company, and YGE’s statement was not accepted by the National Tax Service.
The existence of borrowed-name stocks was revealed by a tax investigation following the aftermath of the ‘Burning Sun’ scandal in 2019. YG Entertainment reportedly stated, “We had to start borrowed-named transactions because we feared the employees’ demand for employee stock ownership was low, which would disrupt funding,” explaining tax evasion was not the goal.
It’s difficult to believe anybody but the most delusional at this point would be surprised by this, but financial crimes are the one thing authorities do seem willing to at least slap them on the wrist for, I guess.
Color me skeptical anything serious will happen, or that it’ll lead to any change, however.