DIR Return Create A Forum - Home
       ---------------------------------------------------------
       TAX HAVEN
  HTML https://comerciointernacional.createaforum.com
       ---------------------------------------------------------
       *****************************************************
   DIR Return to: General Discussion
       *****************************************************
       #Post#: 77--------------------------------------------------
       YG ENTERTAINMENT TAX FRAUD'S EMPIRE
   DIR By: Mónica
       Date: January 24, 2020, 4:30 pm
       ---------------------------------------------------------
       Yang Hyun Suk, the infamous chief executive officer of one of
       the biggest record companies in South Korea, YG Entertainment,
       may not be going through his best moment due to the revelation
       of huge tax fraud methods the company have been practicing since
       the early 2000.
       Through 2019, MBC’s “Newsdesk”, one of the
       most relevant informatives on the country, has been shedding
       more light on the potential allegations of tax evasion Yang Hyun
       Suk and YG Entertainment were facing at the moment.
       On March 21, “Newsdesk” reported on allegations that
       YG Entertainment and Yang Hyun Suk are under suspicion of tax
       evasion in relation to overseas performances. According to
       “Newsdesk,” YG Entertainment has earned
       approximately 300 billion won (approximately $265.7 million) in
       sales every year for the past three years, which also includes
       sales from world tour performances overseas by their label
       artists.
       However, YG is under suspicion of underreporting their overseas
       concert earnings to the National Tax Service, with almost 100
       investigators reportedly present on scene. The apparent method
       involves YG Entertainment reporting the earnings as their
       artists' individual income rather than earnings of the agency.
       As they would be reporting less earnings, the agency would also
       be paying less in taxes.
       In addition to this already shocking revelations, on June 4,
       news outlet "Kukinews" reported that irregular transactions have
       occurred internally at Club NB, a famous and widespread club in
       Hongdae that is said to have ties with Yang Hyun Suk.
       According to official documents, Yang Hyun Suk is not listed as
       an owner of the establishment. However, since the launch, the
       club has been distributing a large sum of cash to Yang Hyun Suk
       upon settling the profits. All of this sits on top of the recent
       allegations of the CEO involvement in prostitution mediations
       with Southeast Asian businessmen and adult entertainment workers
       at Club NB in 2014.
       But he does not seem to content himself just by having strange
       ties with suspicious third parties clubs. It has been reported
       by various news agencies that the record producer registered his
       own clubs under ‘general restaurants’ rather than an
       ‘entertainment establishment’. While general
       restaurant’s pay 10% in taxes, entertainment
       establishments must pay a higher 20% tax.
       He is not just a man heavily involved with tax fraud and illegal
       business, but also has been put into the spotlight by being
       accused of gambling overseas using the company's money and
       illegal trading of foreign currencies over the years.
       At the end, on September 17, South Korea’s tax agency
       decided to levy tax penalties of 6 billion won ($5.04 million)
       on troubled YG Entertainment, according to industry sources. Not
       even a 1% of the amount evaded initially.
       The tax amount is significantly higher than 3.5 billion won the
       entertainment company was charged during a regular tax audit in
       2016, but the company avoided tax evasion changes, local reports
       said.
       The decision by the National Tax Service comes six months after
       it launched a special investigation of the entertainment.
       Although YG Entertainment stock numbers plummeted, some market
       watchers speculate that it is unlikely that the company will
       suffer financial distress from recent taxes or anticipated
       payback of 67 billion won because it has 46.6 billion won in
       cash reserves and cashable assets and 106 billion won worth
       short-term financial assets as of end-June. But they agreed that
       the on-going police investigations will continue to hurt
       investor sentiments and it is unlikely that its share price will
       recover anytime soon.
       But now, I think is important to ask:
       Where is the limit of the amount of illegal activity and tax
       fraud powerful businessmen like Yang Hyun Suk can commit without
       being really penalised. It's relevant to add that though
       nowadays the CEO has ceased active performance at the company,
       he, like all the other executives, haven't really being punished
       for their acts and keep on walking freely without their lifes
       being changed as much. So as a society who is always learning
       and adapting, how can the poor reaction capacity of the police
       and the Korean National Tax Service can disencourage future
       irregularities and enforce the law, when they are making it seem
       so easy to evade.
       Sources:
  HTML https://www.soompi.com
  HTML https://www.rollingstone.com
  HTML http://m.theinvestor.co.kr
       *****************************************************
       Page 1 of 1