SM Entertainment denies rumours of tax evasion

[rikayla.livejournal.com]

SEOUL, March 20 (Yonhap) -- South Korea's tax office said Thursday it has launched an investigation into the country's largest entertainment agency amid rumors of offshore tax evasion by the company that manages some of the top K-pop celebrities.

The National Tax Service (NTS) recently sent dozens of auditors to the headquarters of SM Entertainment located in Gangnam, southern Seoul, to secure accounting books and other financial records, according to the NTS and company officials.

SM Entertainment is the country's leading management agency that represents top K-pop stars, such as Girls' Generation, Super Junior and TVXQ, who have led the Korean culture wave in Asia and other countries.

Industry watchers suspect that the company may have evaded taxes by not reporting fully the money these celebrities earned broad.

An SM Entertainment spokesperson dismissed the allegation as "groundless," claiming that what is under way is a routine tax audit following one in 2009. The NTS declined to comment, saying that it cannot talk about an ongoing probe into a specific company.

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1. [+199, -27] They're making money off of students and they can't even have the decency of maintaining morality or ethics. Disgusting...

2. [+157, -17] Way to scoop poop up for your own artists.

3. [+155, -23] Can't they receive punishment for lying like this?

4. [+27, -26] An obvious response ㅋㅋ YG's staff also evaded tax and made up other excuses in the past ㅎㅎ

5. [+23, -30] Following YG, now even SM ㅎㅎ I guess JYP's the cleanest but poorest agency out of the three

6. [+19, -2] There's no smoke without fire

7. [+18, -9] Really, JYP's the only company out of the three to not have a history of tax evasion

8. [+18, -10] Yeah, I'm sure the National Tax Service sent 30 people for a "scheduled tax investigation". Yeah, okay.

9. [+16, -2] It's already game over. They're not being investigated by a regular investigation team but a team that takes on specific cases where evidence is already on the table. Lee Soo Man has no power in the government so he's jail bound at this rate.

10. [+18, -2] What a big lie. They're not being investigated by a normal team. The team that's on their case is famous for catching out huge companies. This is not simply a csheduled investigation. Do they think everyone's stupid because they're so used to dealing with little kids all of the time?

11. [+16, -7] Wow, media manipulation at its finest ㅋㅋ What happened to that exclusive article that was up here. Now this article is up in the rankings at the speed of light ㅋ (article's indeed gone)


Source: Netizen Buzz, Yonhap News Agency

Comments

[setsuna16.livejournal.com]

If it's true, I hope the people responsible are duly punished. BUT I hope it's not true, just because, you know, I don't want this to impact artists that I love.

I've always wanted a HQ version of that picture, just so I can see where BoA is (provided she's there, of course).

[hearttaek.livejournal.com]

Boa is always in the middle when it comes to smtown pictures.
I want an updated version since they signed a bunch of new actors/actresses/comedians. And maybe some woolim ent thrown in their for the drama too,

[jaejoong.livejournal.com]

Will it finally be time for my interpol prince to get arrested?



Knowing this administration is just as messed up as the one that pardoned him back in 2003, I'm guessing not.

[hearttaek.livejournal.com]

Wait what is this?

[erbalurbal.livejournal.com]

SM, just move your company to america and you can legally dodge your taxes through loopholes created for big corporations

[vizallati.livejournal.com]

i laughed irl

[pepper.livejournal.com]

Not surprising tbh.

[1111-am.livejournal.com]

who is that in that gif?

[lazmy.livejournal.com]

even if it was true they'd deny it lol
i hope it isnt obviously because it'd impact all the artists i love
what is going on

[yakuniku-8.livejournal.com]

well, you know there's a problem when they organise a ceremony in order to thank those who pay they taxes properly...

[countingcr0ws.livejournal.com]

Omg. So that was the tax day thing about. Haha. Irony when Changmin's the representative or smth but sm isn't even properly paying their taxes and like taking it to idk but then earnings sure don't trickle down alright.

[jia-zhang.livejournal.com]

Ah tax evasion. The grandaddy of white collar crime. Bayern Munich's president Uli Hoeness is going through this right now, and he's taking a sentence of three years for.

But imo, the likelihood of anything major coming out of this is inconsequential to the larger running of business. Lots of companies have gone through this and made it out the other side to still be profitable.

Most likely the consequences (if there are consequences) will be fines, the stocks will drop for a period and then things will move on after a few artist promotions. This will result in a loss for this financial quarter that SM will have to make up in the next quarter, which may lead SM to think about more promotions and concerts and uping prices for said concerts and/or products. Maybe the auditors will pin the activities on a few execs, and maybe said execs will take the fall for it. He will be fired by the board and replaced, but otherwise I doubt this will bring about anything dramatic or significant. If the foundation of the enterprise is making revenue, then there is little worry that any dents will be longterm.

So yeah, I think if anything this is just going to affect the fans more than the company in the future. They have to make up for loss somewhere.

[yakuniku-8.livejournal.com]

but Hoeness didnt deny it. he even admitted the amount of money was bigger (5 times?). and he didn't ask for an appeal and just accepted the jail sentence. he looked like a hero ironically ^^

[kneekalies.livejournal.com]

i know they deny it even if it is true, but I hope really hope for the sake of the employees and artist that it isn't


and if its not true then why are they stopping snsd music show promotions ugh
They cancelled MCD and Musbank...happy that they pre-recorded mucore and inki already this week

snsd weren't meant to have a comeback tbh the struggle is real

[ababobaby.livejournal.com]

snsd weren't meant to have a comeback tbh the struggle is real

my heart continues to hurt because of this

[coteo.livejournal.com]

Not even surprised at any of this, not exactly the first time with this company (or LSM).

I just hope this doesn't affect the artists that work under them. :/

[porcupinegloves.livejournal.com]

lol ofc they would deny it
pls pray for oppars and unnirs ty

[lysblack.livejournal.com]

why it is always the richest companies/people who don't pay taxes properly? it's not like they can't afford it.

and yes netizens, jype is poor but honest! (or i would like to believe)

[tsuyoi-hikari.livejournal.com]

Well, when you earn so much and when you see how much money will the government gets from all your hardwork, you will try your best to reduce it. But of course, tax evasion is not the answer since once caught, the penalties from it will be too much for anyone to bear.

[fallendaydreams.livejournal.com]

No wonder SM is pooping out comebacks in 2014; they need all the money they can get to pay what they owe.

[jia-zhang.livejournal.com]

i think they were anticipating this and possibly getting fined so they have to make up for profits somewhere if they get slapped with a major fine.

[ababobaby.livejournal.com]

along with the eyk debacle and this... today's such a rough day

[lysblack.livejournal.com]

what debacle?

[tsuyoi-hikari.livejournal.com]

Interesting! Tax is one of my fave subject so this kind of case always interest me. Since my government doing an awful job at managing my country, I always update myself with any tax information and find ways to reduce tax legally.

SM should managed to reduce their tax without really do any tax evasion esp with the kind of expenses that they spent on their trainees. I wonder why they opt to do that (if they really do it) since there're awful lots of ways to do it in safe and legal ways.

[hitsujiga.livejournal.com]

leave shinee aloooooneeeeeeeeeeee TTTTTTTTTTTTTTTT

[whenlilacsbloom.livejournal.com]

[jaejoong.livejournal.com]

[luvey.livejournal.com]

oh SMe....in a way i kinda hope that CEO Kim resigns due to the scandal whether true or not.

[ababobaby.livejournal.com]

toheart's performing..... so... what's happening really

and Casio baby-g party scheduled today disappeared on official homepage

[racquelle2005.livejournal.com]

whats the casio baby-g party?

and I was meaning to ask you how did you like the rest of quadrons album?

[racquelle2005.livejournal.com]

can you explain that in simpler terms?

[racquelle2005.livejournal.com]

and whats this about YG in netizens comments?

[ashiva.livejournal.com]

"3 club representatives – Im (37), Ji (40), Kim (39) – with relations with YG Entertainment’s owner Yang HyunSeok have been charged with tax violations. This 3 have in the period of the past 4 years deliberately avoid tax payments of up to 1 billion KRW after using the club’s registration fees etc for their own use.

This was after months of secret investigation by the IRS on YG."

Source: http://ygfamilyy.tumblr.com/post/264364515/3-employees-under-yg-ent-suspected-of-embezzling

[jjkk1993.livejournal.com]

Ugh SM please do not fuck this up for your artists.

[airyclouds.livejournal.com]

Honestly because of their empire, SM will get a light slap if you will. Lots of major corporations do tax evasions through loopholes and whatnot but I'm not surprised they did either. It gives them another dent to their already evil image but they are still one of the top entertainment companies in Korea. Shitty sure but I highly doubt the government will let them fail.

I feel like the only reason why SME's tax evasion would be brought out to light is the SK government is cloaking something under the radar again.

[jaejoong.livejournal.com]

Lee JaeHyun, the chairman of CJ entertainment--which is the biggest entertainment conglomerate in Korea--got jailed for tax evasion. And this guy belongs to the Samsung family, so he was no little guy.

It just depends on how severe it really is.

[toshi830.livejournal.com]

If this ends up hurting SNSD, Queen BoA, or f(x)... hell hath no fury like a SONE on the internet communities! I'll show them!

[amandaplan.livejournal.com]

tax evasion doesn't go w/ ur cookie-cutter image sm.

[phililen3.livejournal.com]

With big companies, I've some to expect a lot of indiscretion. Suspicions about tax evasion never surprise me. It is the convictions that do.
It would be nice if they were one of the rare ones who do things by the book though...