YG in perfect storm
The drug/prostitution scandal involving former YG artist Seungri, top, has spiraled out of control, striking YG Entertainment and its founder, Yang Hyun-suk. Photos from Yonhap, Hankook Ilbo, YG Entertainment
By Dong Sun-hwa
This is the first in a two-part series about YG Entertainment's uphill battle with a drug/prostitution scandal involving disgraced K-pop star Seungri. ― ED
By Dong Sun-hwa, Lee Gyu-lee, Park Si-soo
YG Entertainment is under siege on all fronts.
The nation's second-biggest K-pop label has seen its image tossed into the mire as the drug/prostitution scandal involving disgraced Seungri has spiraled out of control. The unsavory brouhaha has given YG fans an excuse to turn away; and the fallout is likely to hurt other “innocent” YG artists such as BLACKPINK, WINNER and iKON ― and possibly pre-debut trainees.
A recent sell-off by investors is a visible indication that YG is in serious trouble that may not abate for some time. More than 220 billion won ($193 million) of capital has evaporated since the scandal hit the headlines nearly a month ago.
The scandal has also struck Yang Hyun-suk, the label's founder and biggest shareholder. The National Tax Service is looking into financial transactions involving the showbiz mogul and his family on suspicions that they have evaded a huge amount of taxes by employing illegal business tactics. YG denies this, but the authorities say they have hard evidence secured while looking into the Seungri case.
The founder's policy of not interfering with YG's artists is another target of criticism.
How far will this scandal reach? Given the complex picture of inter-connected people and entities, it is likely to extend beyond the entertainment industry.
A ranking police officer was recently questioned over alleged “cozy ties” with Seungri and other celebrities linked to the scandal.
President Moon Jae-in recently ordered a thorough investigation into it and all parties involved.
YG keeps silent in self-defense
YG Entertainment has isolated itself from the public amid the ongoing scandal. Korea Times photo by Shim Hyun-chul
As the noose around YG gets tighter, the agency has boosted its defense. Staff members have kept their mouths shut and senior executives say only carefully selected ― or calculated ― words.
Last Friday, chief executive Yang Min-suk spoke to reporters in his first public appearance since the scandal broke. Yang, a younger brother of the scandal-hit YG founder, said he took the case “very seriously” and promised to “faithfully cooperate” with the investigation. But he shied away from commenting on allegations against YG and his elder brother.
The Korea Times contacted several YG insiders to get a picture of the internal situation ― but nobody was willing to speak out.
“I do not know what exactly is going on, but even if I did, I could not reveal anything to outsiders,” a YG official said. He refused to say more.
YG's spokesman did not reply to several phone calls about the situation.
It seems that industry insiders also have limited access to YG's internal situation.
“What's happening inside the company at the moment is beyond my reach,” a music critic said.
He said music industry insiders, including himself, were “very much concerned about what's happening at YG” because it could have a negative impact on the entire K-pop industry.
Another critic said the damage to YG was “deep and wide,” adding that it would take “long time and lots of effort” for the company to restore its tarnished image.
“It's not just a company issue,” the critic said. “The negative impact could reach other innocent YG artists and literally ruin the firm's blueprint for the future.
“At least for now, comeback plans of other YG artists including BIGBANG, remain bleak.”
Seungri declared his departure from BIGBANG and retirement from the entertainment industry on March 11 to take responsibility for the scandal. Screen capture from Seungri's Instagram
Fans disappointed
Seungri, 29, declared his departure from BIGBANG and retirement from the entertainment industry on March 11 to take responsibility for the scandal. The following day YG arbitrarily terminated its contract with Seungri, the toughest punishment it could impose.
But these measures fell short of consoling people who felt upset and “betrayed” by the singer's activities.
“I'm beyond disappointed in him and anyone else who was involved,” a fan wrote on Instagram. “I no longer have any trust or love toward Seungri and he deserves what's coming to him.”
A netizen commented, “As a fan for 10 years, I feel ashamed to say I have been a supporter.”
An online user wrote on Yang's Instagram. “I knew something like this would happen one day. It's actually surprising that YG is still in business.”
Some called on Twitter for a boycott of YG and its artists, while others said they had disposed of albums and products.