YG Entertainment’s Stock Prices Plummet After Yang Hyun Suk Faces Allegations Of Prostitution Mediation
YG stock prices have taken a fall after reports of Yang Hyun Suk’s alleged prostitution mediation.
On May 27, YG Entertainment’s stock prices fell as soon as trading began, and by 3 p.m. KST, fell 12.50 percent (4,100 won, approximately $3.46) and concluded the day at 28,700 won (approximately $24.24), a near 50 percent drop from its peak price of 50,800 won ($42.90) in January.
YG’s market capitalization also saw a drop. During its rise earlier this year, the agency recorded 834.7 billion won (approximately $704.6 million), but recorded 522.3 billion won (approximately $440.9 million) on this day, which shows a loss of about 300 billion won ($253.3 million).
YG Entertainment has often been named as one of the “big three” agencies alongside SM Entertainment and JYP Entertainment. However, YG seemed to fall behind as JYP Entertainment hit 1 trillion won (approximately $844.3 million) with TWICE’s success in Japan and GOT7’s promotion, and SM Entertainment remained strong with its solid lineup and expertise.
Although BLACKPINK gained interest overseas, the agency was negatively impacted due to former BIGBANG member Seungri and the allegations that arose surrounding the club Burning Sun, including assault, prostitution mediation, sexual services, and drug distribution. A controversy also arose when it was revealed that the real owner of club Love Signal turned out to be Yang Hyun Suk and not Seungri. The club was accused of evading taxes by registering as a regular restaurant instead of an adult entertainment establishment.
YG Entertainment’s stock price continued to take blows after the National Tax Service launched a special tax investigation along with new speculations of Yang Hyun Suk’s prostitution meditation. Shareholders’ concerns are rising as the stock price has fallen below 30,000 won (approximately $25.32) even before the results of the March audit.
May 27, MBC’s investigative journalism show “Straight” reported on Yang Hyun Suk allegedly soliciting prostitution for two wealthy South Asian investors. According to the report, 25 women accompanied eight men at a meeting where Yang Hyun Suk and another YG singer at a restaurant were present with investors, and sexual services were allegedly involved at a club that’s reportedly owned by Yang Hyun Suk. “Straight” aired interviews from sources who spoke in detail about the meetings, YG’s involvement, women from Madam Jung’s adult entertainment establishment, and a woman who claimed to have been sexually assaulted at Burning Sun.
YG Entertainment denied the claims, stating that Yang Hyun Suk was present after being invited by an acquaintance, but that there was no solicitation of services.