YG Entertainment and Yang Hyun Suk will have to take care of a massive bill soon!
There were two important news pieces that came out today regarding YG Entertainment and Yang Hyun Suk. The first one being the results of the tax evasion investigation against the agency and the founder.
According to Etoday, the National Tax Service will charge Yang Hyun Suk and his agency additional fees of approximately 6 billion won (approx. $5.1 million).
This comes after The National Tax Service 6 month long investigation into Yang Hyun Suk and YG Entertainment which started in March and wrapped up only in late August. The amount they’re requested to pay includes corporate taxes and income taxes.
However, this is not the first time the agency was fined for a tax investigation. They paid 3.4 billion won (approximately $3 million) back in May of 2016. The $6 billion won figure is not to be confused with a fine for the tax evasion allegations. It’s been reported that the National Tax Agency didn’t find clear evidence that points to tax evasion during their investigation.
$6 billion won isn’t really a big sum of money for an entity like YG Entertainment. However, they are now hit with a way bigger bill that they have to pay VERY soon.
Financial industry insiders have reported that YG Entertainment will most likely have to pay back the huge sum of money LVMH invested in them five years ago.
Back in October of 2014, LVMH Moët Hennessy – Louis Vuitton SE (LVMH) invested 61 billion won (approximately $51.6 million) in the agency in redeemable convertible preference shares (RCPS).
At the time, they set two options for themselves in five years, either converting into common stock at 43,574 won (approximately $36.83) per share, or demanding a repayment of 67 billion won (approximately $56.6 million) including annual interest as well.
This is terrible news for YG Entertainment because their stock price took a huge hit since 2019 began and was never able to recover from it; it’s priced at 23,500 won as of September 15.
According to the financial industry insiders, this will likely mean that LVMH will go for the second option in this case. The repayment of 67 billion won is set to be received on October 16, 2019.
This means that YG Entertainment was hit with a total of 73 billion won ($61,689,015 USD).
What do you think of this?