Suspicions have emerged that YG Entertainment CEO Yang Hyun-suk entertained foreign investors with sex. YG said, "It is not true," but the controversy is expected to spread.
In response to the related reports, police said they will review whether there are any areas that need to be verified.
Based on an anonymous witness' testimony, MBC's investigative reporting program "Straight" reported on May 27 that YG CEO Yang provided two financially talented people from Thailand and Malaysia with sexual favors.
The witness said that CEO Yang and YG officials had a dinner with two foreign rich men and 25 women at a Korean food restaurant in Gangnam and moved to the Club NB to offer sexual favors in July 2014.
It also testified that more than 10 of the women were from Madame Jung, who knew YG, and Hwang Ha-na, the only granddaughter of Namyang Dairy's founder, was there. Hwang is a former girlfriend of JYJ Park Yoo-chun and is currently under arrest for allegedly injecting drugs with Park.
In response, YG denied the report in full. "It is not true at all," said CEO Yang. "I went to a restaurant and the club, but I did not pay for the meal. I attended it by an invitation from an acquaintance. There were no any type of entertainment," he explained.
Meanwhile, YG shares also plunged as Yang was embroiled in allegations of sexual favors. YG was trading at 28,600 won per share on the KOSDAQ market at 11:40 a.m., down 12.80 percent or 4,200 won from the previous trading day.