Dispatch reported further evidence that seems to suggest a possible connection between the President scandal and YG Entertainment, through their November 4 exclusive report. The accusation is that the political powers favored YG Entertainment and doled out unfair (and even illegal) benefits for YG Entertainment.
According to the report, YG Entertainment's CEO, Yang Min Suk, is an active part of President Park's Culture Fusion Project. In July 2013, he was active as a member of the presidential 'Culture Prosperity Committee.' In June of the same year, Yang was also a part of a 71 person delegation team that visited China with President Park to discuss Korea-China economic relationship. Yang was the only entertainment-related person in the delegation; all the other delegates were economic experts.
In March 2014, YG Entertainment launched 'MUJU YG', a non-profit organization to help the youths in need. Who signed the cooperation agreement in 2015? The Ministry of Culture, Sports, and Tourism (Secretary Kim Jong Duk) and Ewha University (President Choi Kyun Hee).
In January of 2016, YG Entertainment worked with the Ministry of Culture, Sports, and Tourism, Hallyu Planning Group, MBC Nanum to hold 'Global Y Generation Movement' project in Indonesia. It was a volunteer event for the local youths.
YG also worked with KT to establish 'Next Interactive K (NIK)'. They built a hologram performance space, 'Play K-Pop' in Jeju Island. Again, the Ministry of Culture, Sports, and Tourism worked with the project, along with Ministry of Science, ICT, and Future Planning.
YG's boy band, Big Bang, was selected as an honorary ambassador for 'Creative Korea' -- a new branding campaign for South Korea. The group will be active as 'Creative Icon' from the 2016 Rio Summer Olympics until the 2018 Pyeongchang Winter Olympics.
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It seems like YG Entertainment works the hardest out of all of the entertainment companies. More exactly, YG has been aggressive in culture fusion and culture prosperity projects. Of course, YG is a business that knows how to work with cultural contents because it is a top Hallyu business.
Therefore, it is reasonable to think that YG just applied to these projects in a normal fashion and simply won over the Ministry of Culture, Sports, and Tourism. Maybe. However, eyebrows were raised when the Blue House (presidential residence, much like the White House in the U.S.) announced the 'Uijeongbu Comprehensive Culture Complex Development' planning brief.
YG Entertainment made a business agreement with the city of Uijeongbu on January 16, 2015, in order to develop the 'K-POP Cluster' complex. YG was set to invest 100 billion KRW (~$92 million) into the complex.
The problem, however, was in the selection process. An open public bidding did not take place. When the city officials of Uijeongbu were questioned, the answer was that the contractor was chosen because of a personal tie or special connection.
During a phone call with 'Dispatch' on November 4, an Uijeongbu official stated, "Regarding the K-Pop Cluster, we had a personal connection with YG, so we suggested that they join in the business. There was no contact with the other agencies."
However, according to Korea law (Local Contract Law, Article 9, clause 1), when a local government is trying to hire a contractor, they must hold an open public bidding. It is to prevent any undue or unlawful influence in the decision-making process.
The reason why President Park's Culture Fusion Project became controversial to begin with, is because it lacked transparency. Many suspect that the reason why so many private contracts exist in the project is because the influence of Choi Soon Sil and Cha Eun Tak.
Back to the K-POP Cluster, the Uijeongbu official stated to Dispatch, "When the culture complex site is created, (based on the contract) the lot will be sold to YG. However, the site will need to be used in a manner aligned with the original intended use."
The land YG will be buying is 49,600㎡ (around 12.2 acres). Based on the information YG released to media, YG had prepared 37,500,000,000 KRW (around $32.8 million USD). That is a price of about 2,500,000 KRW ($2,190 USD) per 3.3㎡. However, the price has risen dramatically to about 8,000,000 KRW ($7,000 USD) per 3.3㎡ because of a new highway that is being built near the area. The Greenbelt zoning law that was the only hurdle to going forward with the project is also being taken care of by the government.
Back on July 7 of this year, President Park emphasized that there should be urgent action for the Uijeongbu Comprehensive Culture Complex establishment, during the 10th annual Commerce Investment Promotion Meeting.
The next day, on July 8, Ahn Byung Yong, the mayor of Uijeongbu thanked the president, stating, "Because of President Park's order, the Secretary of Land Infrastructure and Transport along with the Secretary of Culture Sports and Tourism promised that they would work to clear the limited development policies."
One word from President Park and the difficult obstacles in the way were solved. An Uijeongbu official told Dispatch, "Reviews from the Ministry of Land, Infrastructure and Transport have been completed. After the paperwork is done, we will announce the clearance of the greenbelt zone."
When everything is over, YG will triple its profit from the investment with the sale of the land.
Experts are questioning the way YG were able to make a contract for this project. They say that using 'personal ties' to select a contractor and business partnership for a government project is problematic. For example, SM Entertainment went through an open public bidding to win Coex Artium to build their SM Town Theme Park back in 2012.
On November 3, Congressman Ahn Min Suk stated, "Choi Soon Sil and Jang Shi Ho have infiltrated into the entertainment industry and have influenced a large entertainment agency and certain singer/group." Many suspect that the agency the congressman spoke of is YG Entertainment.
As explained thus far, no other entertainment companies have worked this closely with the Ministry of Culture, Sports, and Tourism.
Dispatch also reports that the suspected 'tie' between YG and Choi Soon Sil is Cha Eun Tak. Cha and YG have worked together for a long time. He was the creator and director for Big Bang's "Lies" MV and more recently, Psy's "Hangover" MV.
Of course, all of this might just be coincidental. We cannot talk about 'inappropriate favors' just because a few connections that may or may not exist. However, YG definitely seems to have invested a lot into the projects of the Ministry of Culture, Sports, and Tourism, which will give huge ROI (Return On Investment) for YG if the Uijeongbu Culture Complex development finishes as planned.