YG Entertainment continues to catch up in scandals related to CEO Hwang’s insider trading allegations.
According to an exclusive report by SBS ‘8 News’ on the 5th, the National Tax Service confirmed that executives and outsiders, including Hwang, a CEO of YG Entertainment, acquired Korean shares under borrowed names and made profits. They had revealed the existence of borrowed-name stocks in a tax investigation that began with the “Burning Sun” incident in 2019.
More than 210,000 shares of this company were allocated to employees prior to the listing of KOSDAQ in 2011. Mrs. Hwang, who was in charge of finance at the time, acquired shares under the name of her subordinate, Mr. Kim. She reportedly had her husband’s friends send the stock purchase funds to Kim to hide her borrowed name.
She left the profits from selling stocks in Kim’s account and spent them on construction costs and living expenses. Currently, Mrs. Kim is a director of finance. It was an audit to monitor the operation of the company’s owner union at that time.
In the investigation, a total of 3 YG Employees traded illegally under borrowed names. And 2 were reportedly aware of the possibility of capital gains – current CEO Hwang, who was previously in charge of finance at YG Entertainment, and current finance director Kim.
Accordingly, a close aide to former CEO Yang Min Seok has received shares illegally in the name of his employee Ha by depositing stock payments through Ha’s account.
Regarding this incident, reporters said they went to the headquarters to hear the explanation from CEO Hwang and Director Kim. However, they did not receive any further information.
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”. They explained tax evasion was not the goal. However, the Office of National Tax Administration is reportedly not accepting the claims.