News of the legal scrutiny cast a shadow over YG Entertainment’s stock performance, which had been soaring after a successful streak. Prior to this development, the company enjoyed a consistent six-day rise in its stock value, fueled by impressive second-quarter financial results. This positive momentum was abruptly halted as the investigation brought uncertainty into the mix.
At precisely 9:22 a.m. on the 13th, YG Entertainment's stock was trading at ₩97,200, reflecting a decrease of ₩4,900 or 4.80% from its previous closing value. The stock had initially opened at ₩102,000, only to drop further to an intraday low of ₩97,100, signifying a 4.89% fall. This sharp decline starkly contrasted the bullish trend observed in recent days.
This downturn came as a surprise given the company’s recent financial accomplishments. On August 8, YG Entertainment proudly announced a return to profitability in the second quarter, with consolidated revenue reaching ₩100.4 billion and an operating profit of ₩8.4 billion. Their net income of ₩11.2 billion marked a positive year-on-year turnaround. The stock had even reached a 52-week peak of ₩104,900 on August 12.
The roots of the controversy trace back to a complaint filed with the police by a composer identified as "A." This individual accused G-Dragon and Yang Hyun-suk of unlawfully reproducing and distributing his musical work as part of an album without consent. The complaint, lodged in November of the previous year, led Seoul’s Mapo Police Station to initiate a formal investigation.
YG Entertainment has stood firm in rejecting these accusations. According to a statement released to Ilgan Sports by a company representative, the controversy originated from a 2009 solo concert incident. It was clarified that two songs bearing identical titles were mistakenly included in the concert setlist, asserting that this situation does not constitute unauthorized album reproduction.
In their pursuit of truth, the police have reportedly conducted interviews with individuals connected to the case and executed two search operations at YG Entertainment's headquarters. These investigative measures underscore the seriousness with which the authorities are approaching this complex situation.