In 1996, Yang Hyun Suk established YG Entertainment. YG Entertainment successfully developed and produced artists, most notably Big Bang, BlackPink, PSY, 2NE1, iKON, and many more. Channel-Korea will explain one by one all the scandals and controversies of Yang Hyun-suk, former CEO of YG Entertainment.
Yang Hyun-suk’s Scandals and Controversies
Yang Hyun Suk is no stranger to scandals and controversies. On the TV screen, he was known for his strong and vicious comments towards his trainees. From November 2018 until today, his company, YG Entertainment received national and global attention for all the wrong reasons. It all started by Seungri’s Burning Sun scandal and snowballed to multiple other scandals. Let’s find out the details of all the scandals and controversies.
His Marriage with Lee Eun-joo
Yang Hyun Suk has been married to a member of the girl group Swi.T, Lee Eun Joo, for almost 20 years. He got married without a ceremony because he confessed he felt embarrassed just by the thought of him wearing a tuxedo and standing in front of other people. In an episode of SBS’ Healing Camp, aired on May 21st, 2012, he confessed how he had fallen in love with Lee Eun Joo. She is the younger sister of former Sechs Kies member Lee Jae Jin. During a TV program when Lee Jae Jin was giving a house tour, Yang Hyun Suk caught a glimpse of Lee Eun Joo while washing dishes and immediately started to take in interest in her. At the time, Lee Eun Joo was 14-15 and Yang Hyun Suk was 26-27 years old. Upon knowing the truth, viewers considered his preference and their age gap to be disturbing. Several years later, in 1997, Lee Eun Joo was recruited as YG entertainment trainee at 16 years old. Yang Hyun Suk confessed that he deliberately ignored the fact and did not give enough support to Swi.T. Swi.T was only one of two failed projects of YG Entertainment. He feared that had Swi.T become popular Lee Eun Joo would be popular too and dating her would become more difficult. This story also received lots of negative comments from the netizens. Yang Hyun Suk and Lee Eun Joo had been secretly dating for 9 years and got married due to Lee Eun Joo becoming pregnant. Yang Hyun Suk got his second child in 2012.
Tax Evasion
On March 6th, 2019, a media outlet, Kuki News, reported an entertainment establishment called Love Signal is being suspected of a fraudulent tax report. Love Signal is registered as a restaurant but in fact, operates as a nightclub. According to Korea’s Food Sanitation Act, a food establishment or a restaurant must pay 10 percent in value-added taxes on profits while entertainment establishments or nightclubs must pay additional 10 percent special consumption tax and 3 percent educational taxes. According to the media outlet, Yang Hyun Suk owns the majority of shares of the investment company that has legal rights of Love Signal. In 2015, Mapo District established a regulation. It stated that regular restaurants can allow customers to dance only in the areas between tables and chairs. Regular restaurants must not have a separate dancing stage. The regulation was meant to help club owners in Hongdae to thrive by registering their clubs as regular restaurants. Hongdae is a residential area where adult entertainment establishments are forbidden. However, Kuki News reported that on February 28th, 2019, Love Signal had a structure resembling a stage and had poles installed on the stage. Guests could be seen dancing on the stage. It turned out that Yang Hyun Suk owns more clubs in Hongdae that operate like Love Signal. On March 7th, 2019, Kuki News suspected that the investment company owned by Yang Hyun Suk also operates three other nightclubs, including Gabbia, Moon Night, and Samgeori Byulbam. All three of those nightclubs are registered as general restaurants, however, all clubs have stages or space for customers to dance. On March 20th, 2019, the National Tax Service (NTS) conducted an investigation of YG Entertainment for tax evasion. Around 100 investigators visited YG Entertainment headquarters and collected related financial data and documents. NTS also suspected that YG Entertainment is hiding overseas assets. MBC’s Newsdesk reported that YG Entertainment has garnered around 300 billion won (around $265.7 million) in sales every year since 2016. The earnings also included income from oversea performances of their artists. YG Entertainments was suspected for reporting those earnings as their artists individual earning rather than the company earnings. This tax evasion method meant that YG Entertainment would be reporting less income, and therefore, pay less income tax.
Involvement in the Burning Sun Scandal
Mediated Prostitution Service
On January 31st, 2019, Yang Hyun Suk shared a statement through YG Entertainment’s official site regarding Seungri and Burning Sun. He denied YG Entertainment’s connection with Burning Sun and said that their artists’ business operations were independent and not related to YG Entertainment. He personally denied his involvement with the club and claimed that he has never visited Burning Sun. He said that Seungri was in the state of resigning as Burning Sun Executive Director because he was enlisted for military service in March or April and shall not be engaged in any profit related activity other than the military activity.
