YG CEO and Yang Min-suk's aide and executives embroiled in employee stock fraud scheme following 'Burning Sun' audit

  • YG CEO and Yang Min-suk's aide and executives embroiled in employee stock fraud scheme following 'Burning Sun' audit

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    Article: [Exclusive] Acquisition of employee stock-ownership shares under YG employees' names.. Burning Sun investigation bomb


    Source: SBS


    YG CEO Hwang, Yang Min Suk's aide and executives are embroiled in allegations of stock fraud.

    According to an exclusive SBS report, YG Entertainment that led the spread of K-pop by producing many famous idol groups committed stock fraud through employee stock ownership.

    At the time of YG's listing in KOSDAQ in 2011, the agency raised over 3.6 trillion won from the first day of the IPO that more than doubled in the following year. Prior to the listing, about 210,000 stock shares were allocated to employees and the National Tax Service confirmed that an executive and outsiders of the company made a profit by acquiring employee stock shares under a second name.

    Hwang, the Finance Director at the time, acquired stocks under the name of manager Kim Mo, a subordinate, and asked her husband and friends to send stock purchase funds to Mr. Kim to hide the name of the true beneficiary. There was also an understanding that the profits from the stock sales were left in Kim's account and used for construction costs and living expenses. Hwang is now the current CEO of YG and Mr. Kim is now the current Director of Finance.

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    At the time, Mr. Kim was the auditor in charge of monitoring the employee stock ownership program and there were 3 YG employees who owned stocks in the company after a loan transaction request. Two of the employees were told of the possibility of making profits if they took advantage of the investment attraction of YG at the time of listing.

    Mr. A, an aide to former YG CEO Yang Min-suk also received stocks in the name of Mr. Ha, an employee, and the stock payment was deposited through Ha's account.

    The employee stock fraud scheme was almost buried until the National Tax Service opened a tax audit into YG Entertainment following 'Burning Sun' incident that began in 2019.

    Reporters visited YG's headquarters for explanations from current CEO Hwang and Director Kim but did not receive any response when they tried to contact them.

    YG is said to have called tax authorities and stated, "The company had to inevitably enter into loan transactions with employees as the demand for employee stock ownership before the listing was low disrupting funding. It wasn't to evade taxes."

    The IRS reportedly did not accept YG's claims.

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    1. Yang Hyun Suk and all the executives need to get investigated and jailed! Who is taking care of them from the back??? The entirety of YG is a criminal pharmacy enterprise.
    2. Drugs, prostitution, illegal stock frauds using second-name accounts...what is the real YG and who is behind them????
    3. What happened to the senior officer who worked in the Civil Affairs office aka “police chief” in group katalks?? He was even photographed with the former police chief?
    4. They conducted a tax audit in 2019 but the news is just coming out now..? And the Finance Director at the time who's now the current YG CEO was involved...? Why is there no information of her getting jailed or fined..?
    5. Ah~ YG is a total s*** hole gambling drug ring..
    6. YG isn't a true agency but a rotten pharmacy. That's why even if management changes nothing is going to change because its a yangachi company run by dirty rotten thugs..
    7. And when will Burning Sun investigations come to an end anyway!!!! That's what everyone is curious to know.
    8. This should've been properly investigated when Burning Sun came out. There are no documents left now since YG brought those shredding trucks at dawn.
    9. Yang Hyun Suk is seriously trash!
    10. Investigate Burning Sun again!!!! Why is Seungri not arrested yet!!!?
  • This is actually old news and barely caused a blip in the news. SBS just only reported it a couple of weeks ago, but it's old news. And no one really paid attention or cared.


    This was already corrected.


    1. It had nothing to do with Burning Sun as there's no link between YG and BS.


    2. It was a part of a routine tax audit from 2 years ago that all companies go through. The government will always find back-taxes.


    3. This was from 10 years ago when YG first went public on the stock market. This was an effort to raise capital as YG stated as not enough employees were taking advantage of the employee-stock purchase.

    The funds from the profit just sat in the account and went towards construction expenses.


    4. This is NOT a current investigation. It was resolved 2 years ago.


    All that happened was they paid back-taxes on capital gains. Again, anytime the government does an audit they'll always find taxes companies owe. They're always going to get theirs. All major companies including SM and JYP have paid tax fines through audits.

    This also isn't insider trading, as some incorrectly labeled it, otherwise the government would have done more than make them pay taxes.

    This is a closed and resolved matter.

    YG Ombudsman: I correct misinformation with facts and numbers, not opinions. Unless I know you I don't read responses to my posts, so don't quote me unless I've conversed with you in the past.

    Favorite YG Producers: Rovin, Millennium, Future Bounce

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    Edited 4 times, last by Blue2012 ().

  • no wonder their ass is becoming mid-size company

    they need to reform the whole company

    I'm actually going to post here in a couple of days when official numbers are reported. A report came out that YG is #1 in sales growth among all companies in the entertainment sector for the first quarter.

    The official numbers haven't come out yet, but it's expected to be up 30% to 70 billion won first quarter sales and with 5.2 billion in operating profit.


    Hwang Bokyung is highly regarded and seen as extremely smart and she's done a great job stabilizing YG since taking over as CEO in 2019 given what she's had to deal with and given the pandemic. YGE has been expanding and investing and is finally turning to the black.

    YG Ombudsman: I correct misinformation with facts and numbers, not opinions. Unless I know you I don't read responses to my posts, so don't quote me unless I've conversed with you in the past.

    Favorite YG Producers: Rovin, Millennium, Future Bounce

    1605128282-image.png1606716115-20201130-yg.jpg

    Edited once, last by Blue2012 ().

  • If this was indeed insider trading, wouldn’t there have been more serious repercussions? I mean this is a serious crime tho....

    Exactly. Government just wanted their taxes on the gains.

    YG Ombudsman: I correct misinformation with facts and numbers, not opinions. Unless I know you I don't read responses to my posts, so don't quote me unless I've conversed with you in the past.

    Favorite YG Producers: Rovin, Millennium, Future Bounce

    1605128282-image.png1606716115-20201130-yg.jpg

  • I'm actually going to post here in a couple of days when official numbers are reported. A report came out that YG is #1 in sales growth among all companies in the entertainment sector for the first quarter.

    The official numbers haven't come out yet, but it's expected to be up 30% to 70 billion won first quarter sales and with 5.2 billion in operating profit.


    Hwang Bokyung is highly regarded and seen as extremely smart and she's done a great job stabilizing YG since taking over as CEO in 2019 given what she's had to deal with and given the pandemic. YGE has been expanding and investing and is finally turning to the black.

    i wonder why these articles aren't translated to the international fans, we only hear about the negative incorrect title like these

  • i wonder why these articles aren't translated to the international fans, we only hear about the negative incorrect title like these


    I stopped using translated articles. You can't rely on them. They only translate what they want. Like this one for example has low upvotes and wasn't worth translating because it really wasn't newsworthy and got little attention in Korea.

    I go directly to Naver and watch the news daily.


    And even Korean news outlets are untrustworthy. This, for example, is old news from something that was resolved 2 years ago but SBS reported it like it was new.


    Good stories can be found and is reported. Like I said, I go directly to Korean news sources.


    What gets filtered to international fans is very little and often times distorted.

    YG Ombudsman: I correct misinformation with facts and numbers, not opinions. Unless I know you I don't read responses to my posts, so don't quote me unless I've conversed with you in the past.

    Favorite YG Producers: Rovin, Millennium, Future Bounce

    1605128282-image.png1606716115-20201130-yg.jpg

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