In the new report, the program alleged that Yang Hyun Suk had been involved in soliciting prostitutes for foreign investors. According to the program’s sources, back in July 2014, several high-ranking figures from YG Entertainment accompanied two Southeast Asian investors to an upscale restaurant in the Gangnam district of Seoul.
An anonymous witness claimed, “The people from YG met with the investors at least three times. I also know that famous singers from YG came to talk to them for a long time. There were about eight men and about 25 women invited. I understand that at least 10 of the women were brought by Madam Jung from an adult entertainment establishment. Hwang Ha Na was also there.”
The witness continued, “After the meal, they headed to club NB in Gangnam, which has ties with Yang Hyun Suk, and had fun while Yang Hyun Suk watched them from the balcony. The foreign investors chose the women they liked and went back to their lodgings. Most of them came out for dinner the next day. There were a lot of bar girls at every meeting, and they also moved the party elsewhere for a ‘second round.’ Some of the women even went abroad on the investors’ private helicopters.”
A famous singer that was present at the meal commented, “I went to say hello, not to accompany them,” adding, “I didn’t know that there was any solicitation of prostitution services. Madam Jung is just a person I know.”
While reportedly mediating prostitution services, Seungri paid for the hotel expenses with YG Entertainment’s corporate credit card. Therefore, there were suspicions that YG Entertainment may have been involved with the mediation of prostitution services, but the police did not investigate the company.
“Straight” also interviewed a woman who claimed to have been sexually assaulted by a wealthy Thai investor after being drugged at the now-notorious club Burning Sun. The woman asserted that an executive from YG Entertainment subsidiary YGX had been present at the time, stating, “The YGX executive was in the corner. Looking back now, it seemed like he was taking care of the Thai [investors], like he was guiding them.”
However, the investor in question appeared on a Thai broadcast and claimed that he had no relationship with Seungri. Nevertheless, “Straight” reported that this investor has had ties with YG Entertainment since at least 2014.
Yang Hyun Suk responded by denying any involvement in the alleged mediation of prostitution services, stating, “It’s true that I was present, but I didn’t know that prostitution services were solicited. I didn’t pay for the meal expenses myself. I don’t know anything about it. There was no further contact with the investors. I know Madam Jung, but I don’t know why the women attended.”
“Straight” also raised suspicions about collusive ties between the Gangnam District police and clubs like Burning Sun and Arena, urging the police to investigate these allegations of collusion and prostitution mediation in a transparent manner.
YG Entertainment's stock prices plummet after Yang Hyun Suk faces allegations of prostitution mediation
YG stock prices have taken a fall after reports of Yang Hyun Suk’s alleged prostitution mediation.
On May 27, YG Entertainment’s stock prices fell as soon as trading began, and by 3 p.m. KST, fell 12.50 percent (4,100 won, approximately $3.46) and concluded the day at 28,700 won (approximately $24.24), a near 50 percent drop from its peak price of 50,800 won ($42.90) in January.
YG’s market capitalization also saw a drop. During its rise earlier this year, the agency recorded 834.7 billion won (approximately $704.6 million), but recorded 522.3 billion won (approximately $440.9 million) on this day, which shows a loss of about 300 billion won ($253.3 million).
YG Entertainment has often been named as one of the “big three” agencies alongside SM Entertainment and JYP Entertainment. However, YG seemed to fall behind as JYP Entertainment hit 1 trillion won (approximately $844.3 million) with TWICE’s success in Japan and GOT7’s promotion, and SM Entertainment remained strong with its solid lineup and expertise.
Although BLACKPINK gained interest overseas, the agency was negatively impacted due to former BIGBANG member Seungri and the allegations that arose surrounding the club Burning Sun, including assault, prostitution mediation, sexual services, and drug distribution. A controversy also arose when it was revealed that the real owner of club Love Signal turned out to be Yang Hyun Suk and not Seungri. The club was accused of evading taxes by registering as a regular restaurant instead of an adult entertainment establishment.
YG Entertainment’s stock price continued to take blows after the National Tax Service launched a special tax investigation along with new speculations of Yang Hyun Suk’s prostitution meditation. Shareholders’ concerns are rising as the stock price has fallen below 30,000 won (approximately $25.32) even before the results of the March audit.
May 27, MBC’s investigative journalism show “Straight” reported on Yang Hyun Suk allegedly soliciting prostitution for two wealthy South Asian investors. According to the report, 25 women accompanied eight men at a meeting where Yang Hyun Suk and another YG singer at a restaurant were present with investors, and sexual services were allegedly involved at a club that’s reportedly owned by Yang Hyun Suk. “Straight” aired interviews from sources who spoke in detail about the meetings, YG’s involvement, women from Madam Jung’s adult entertainment establishment, and a woman who claimed to have been sexually assaulted at Burning Sun.
YG Entertainment denied the claims, stating that Yang Hyun Suk was present after being invited by an acquaintance, but that there was no solicitation of services.
Sources: Naver (1, 2) and Nate via Soompi (1, 2)