The once-buoyant stock of YG Entertainment encountered turbulence following the unsettling news about the ongoing police investigation involving G-Dragon and Yang Hyun-suk, over accusations related to copyright infringement. This development came as an unwelcome surprise, disrupting a prosperous phase for YG, which had previously basked in the glow of robust earnings reports that had bolstered its market position.
The morning of the 13th saw YG Entertainment's stock trading at ₩97,200, reflecting a ₩4,900 or 4.80% drop from its previous closing. The stock had initially opened at a slightly diminished value of ₩102,000 but later dipped to an intraday low of ₩97,100, marking a significant 4.89% decline, mirroring the market's reaction to the unfolding drama.
This unwelcome dip starkly contrasts with the company's recent financial achievements. On August 8, YG Entertainment proudly announced its re-emergence into profitability during the second quarter, highlighting a consolidated revenue of ₩100.4 billion and an operating profit of ₩8.4 billion. The reported net income of ₩11.2 billion represented a positive turnaround from the previous year. The stock had achieved a 52-week high of ₩104,900 on August 12, showcasing the company's recent financial strength and stability.
The roots of the investigation trace back to a complaint lodged in November by a composer, identified only as A, who accused G-Dragon and Yang Hyun-suk of infringing upon his copyright. According to police sources, the allegations claim that they reproduced and distributed one of his works without permission, integrating it into an album. The Mapo Police Station in Seoul has taken up the investigation following this complaint.
In response to the allegations, YG Entertainment has firmly denied any wrongdoing. A statement from the company, as reported by Ilgan Sports, clarified that the issue arose from a 2009 solo concert, during which two songs sharing the same title were inadvertently included in the setlist. The company emphasized that this incident does not amount to unauthorized album reproduction, dismissing the claims of copyright infringement.
As part of the comprehensive investigation, law enforcement has reportedly conducted interviews with individuals connected to the case and executed two separate raids on YG Entertainment's headquarters. These measures underscore the seriousness with which the authorities are pursuing the allegations, casting a long shadow over the company's recent financial successes.