Power Industry makes a statement about Burning Sun, “Not the real owner”
4.12.19
MBC's "News Desk" broadcast screen aired on Wednesday.
In an official position on Wednesday, the power industry refuted a report by MBC's "News Desk" on Wednesday and said the allegations of the embezzlement were not true.
The News Desk said on Wednesday that the power industry received exorbitant rent from Club Burning Sun. By the way, Burning Sun began paying 100 million won every month since late last year, more than six times the initial deposit. Police are investigating the possibility that the power industry may have misappropriated the money in the name of rent. The power industry and the extent of the embezzlement of Seungri that the police have identified so far have also been confirmed to be 600 million won," it said.
The power industry, however, said in its official stance that it had set low rents until Burning Sun’s business was stabilized, and that it had raised the rent against the surrounding market three months after the opening of the Burning Sun. "We have issued tax invoices for the sale of rental fees and this remains in the National Tax Service records," he said. "The fair accounting process is mistaken for embezzlement," stressing that the news desk's report is an unfair allegation.
The increase in rent is also said to have been made under an agreement with Burning Sun. "A police investigation was carried out on July 11. If necessary, we will faithfully conduct police investigations in the future," he said.
The power industry has also corrected rumors that the power industry is the de facto owner of Burning Sun and announced that it will take legal action against the speculation report.
According to the power industry, the power industry was just an investor in "Burning Sun Entertainment" and a lease contract relationship with the company. I've even terminated my lease contracts. The power industry is one of the corporations operated by Le Merdien as a franchise," he said, drawing a line with the Burning Sun issue.
The intelligent crime investigation unit of the Seoul Metropolitan Police Agency on Wednesday sent investigators to the office of the power industry to search for data on the embezzlement allegations.
◆The following is the full text of the official position of the power industry related to the Burning Sun issue.
1) The suspicion of embezzlement of power industry (CEO Choi Tae-young) is not true.
Among the MBC News Desk's April 11 report, the following is different from the facts.
Lending 1,000 square meters of space to the club, the power industry took only 11.66 million won a month for rent. It's an exorbitant rent for the surrounding market. By the way, according to an MBC report, the police have confirmed that Burning Sun has paid over 100 million won a month to the power industry in the name of rent. It's more than six times the amount originally contracted. Police are investigating the possibility that the money was not the real rent but the money that diverted Burning Sun's profits to the power industry in the name of the rent. In a related move, the police have identified the power industry and the extent of the embezzlement of Seungri at 600 million won."
– It usually takes at least six months to get to any sales place or post-op stabilization. Thus, the initial rental fee, which is unclear about the success or failure of the company's operations, was set at 16.66 million won, but three months after the opening, the monthly rental fee was raised to 100 million won to meet the market price. This rent was issued monthly on rental sales, and the Burning Sun side was also given a normal accounting account. This is also in the National Tax Service's records.
– Therefore, raising rent to market and accounting fairly for rent sales are mistaken for 'arrogance'. This is an unfair suspicion.
– Also, the allegation that the power industry received the Burning Sun's earnings 'allotments' in the name of 'rents' is not true. If it was a dividend, the amount of dividends should vary in proportion to monthly sales, and the rent received by the power industry was fixed at 100 million won per month.
– On the contrary, if the monthly rent was kept at 16.66 million won, which is significantly lower than the market price, then the power industry would be in violation of the law that favors Burning Sun Entertainment. The power industry has asked Burning Sun, the rental business, to pay for the rent, and has increased the rent under mutual agreement.
– On April 11, a police investigation was conducted in the power industry. If necessary, we will faithfully conduct police investigations in the future, and at the same time we will actively address any suspicions that are wrong.
2) Power industry corporation has never been involved in the management of Burning Sun, and the rumor that it is the de facto owner of Burning Sun is not true either.
– The power industry has not been involved in the management of the Burning Sun. It's a completely unrelated company, just an investment company that invested in 'Burning Sun Entertainment' because it highly valued singer Seungri's business.
– With this investment, it was a lease agreement from December 2017 to February 2019. But this issue has caused huge investment losses. We have cancelled the lease and requested the corporate liquidation process.
– So the rumor that 'the power industry is the de facto owner of Burning Sun' is not true, and we are going to take legal action against this speculative report.
– On the other hand, Le Merdien is one of several brands of the world's hotel chain Marriott. Power industry is a company that operates Le Merdien brand as a franchise. In other words, this Burning Sun is not related to the global brand Le Merdien (Seoul), as it covers the business relationship between the power industry and the Burning Sun.
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