YG Entertainment founder Yang Hyun-suk was officially booked by the police on 17 July for allegedly arranging for social escorts to accompany investors in 2014 and sending them on a holiday with investors in Europe in the same year, according to YonHap.
Yang, 49, initially denied all allegations.
This comes mere weeks after Hyun-Suk stepped down from his positions at YG Entertainment after its artists were being embroiled in a long-running high-profile K-pop scandal, including allegations of drug use. Two artists under the top entertainment agency in Korea — Seungri and iKon's B.I. — quit showbiz due to allegations of prostitution and illegal drug use respectively.
Following the news, YG Entertainment's stocks have plummeted following news of its founder was booked on suspicions that he arranged sexual services for foreign investors, according to local news outlets.
Korean news site Soompi reported that as of 18 July, YG Entertainment's stocks were priced at 26,700won (approximately $22.68USD), a 3.09 percent drop from the previous day.
Yang Hyun-Suk rose to fame as a member of Seo Taiji and Boys during the 1990s, and established YG Entertainment in 1996. He was the mastermind behind the careers of some of K-pop's biggest names, including BIGBANG, BLACKPINK and PSY.