On May 5, SBS News reported that numerous YG Entertainment executives, including the company’s CEO were caught insider trading. They got caught during a police investigation regarding the Burning Sun scandal that happened back in 2019.
According to the reports, YG Entertainment executives and outsiders unrelated to the company acquired shares of employee stocks while borrowing employee names. It was confirmed by SBS News that YG Entertainment’s current CEO Hwang Bo Kyung was one of the executives.
It was reported that Hwang Bo Kyung had acquired shares of employee company stocks using the name of a manager ‘Kim.’ Hwang Bo Kyung allegedly paid ‘Kim’ separately for the employee stocks. It was further revealed that the profits made from the stocks were left in Kim’s account and used for construction and other living costs.
Hwang Bo Kyung was the former finance director for the agency and currently serves as the CEO of the entertainment label. Manager ‘Kim’ is the current finance director for YG Entertainment.
Similarly to Hwang Bo Kyung, the former CEO of the company and brother of Yang Hyun Suk, Yang Min Suk also received illegal shares of the company by using the name of employee ‘Ha.’ The funds for the stocks were made using Ha’s account.
While the insider trading was near buried, an investigation and tax audit related to the Burning Sun scandal of 2019 unearthed the situation. A representative from YG Entertainment released a statement regarding the investigation stating,
The demand for the company employee stocks were hitting a low so we inevitably decided to complete borrowed-name transactions. The low demand of the shares would have disrupted the company’s finances greatly.
— YG Entertainment representative
While YG Entertainment claims that the insider trading was not completed to evade taxes, the National Korean Tax Service did not accept their claim.