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| Yang Hyun-suk |
The nation's tax agency has launched an audit of YG Entertainment to check allegations of tax evasion.
This is the latest development in the sex scandal centering on Burning Sun nightclub involving Seungri, a former member of boy band Big Bang, which has been fast spilling over to the police as well as other high-ranking public figures.
The National Tax Service Seoul Regional Office said Wednesday it is investigating YG Entertainment head office in Hapjeong, western Seoul, over allegations the company head Yang Hyun-suk has engaged in tax evasion.
About 100 officials with the Seoul branch were dispatched to the office and secured documents involving the firm's accounting and financials.
The probe followed an allegation that Yang has been the de facto owner of Love Signal, a club in Seoul owned by Seungri on paper.
Yang is suspected of having dodged a substantial amount of taxes by registering what is an apparent entertainment facility as a restaurant.
The tax agency also filed a complaint with police against a man surnamed Kang, the de facto owner of club Arena in Gangnam over suspected tax evasion.
Arena is one of many clubs the authorities believe are involved in the scandal.
The investigations came in response to President Moon Jae-in's remarks that the tax agency was somehow implicated in the scandal.
"The scandal involving the club in Gangnam is under suspicion that a new privileged class including top entertainment figures have largely benefited and carried out illegal activities under the watch and tacit approval of police and tax authorities," Moon said Monday.
The comments were part of his call for a thorough investigation into the scandal.
The NTS issued a statement denying its culpability. "We deny the allegation in the strongest possible terms. We were not able to conduct a thorough investigation because we are not an agency that can open an investigation unlike other law enforcement agencies. That is why we referred the case to the police," the statement said.
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