A sex scandal with #MeToo implications is shaking up Korea's $5 billion K-pop music industry.

Entertainment companies invest up to $100,000 in training and housing children as young as 11 in conditions akin to indentured servitude.

Shares in YG Entertainment, which manages a K-pop star at the center of the scandal, are down 27 percent.

K-pop is one of South Korea's most recognizable exports, along with Samsung phones and Hyundai autos. Its brightest stars, like Big Bang, Psy, BTS and Twice, are adored by fans who even consider it a sign of affection to invest in the publicly traded entertainment companies that manage their favorite stars. It's a $5 billion industry that helps propel local tourism and sales of consumer goods like the elaborate skincare and makeup regimens in K-beauty.

Those who succeed in the cutthroat K-pop industry enjoy immense financial and cultural privilege. Those who don't can spend years training or working in exploitative conditions that can be akin to indentured servitude, according to music industry veterans and experts who study contemporary Korean society.

Aspiring K-pop stars often leave family homes to start training at ages as young as 11 and debut as minors, according to Euny Hong, author of "The Birth of Korean Cool." Entertainment companies can invest up to $100,000 on a trainee who can spend years working to repay the investment, as can be regularly seen on Korean reality-television series like "Treasure Box." Trainees can work for management companies that control their eating habits and monitor cell phone usage — and cite romantic relationships as grounds for breaching contracts.

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"K-pop is usually seen as a business, it's a cold-blooded business by entertainment companies," said Suk-young Kim, a Korean studies professor at UCLA. "The main concern for entertainment companies is to sell the best-selling products that appeal to a wide range of consumers for maximum profit. And what goes unaddressed is the ethical implications and human beings and feelings."

Now, K-pop is at the center of a nationwide uproar over a sex and drugs scandal fueling a #MeToo movement around the sexual exploitation of women in all levels of Korean society. South Korean President Moon Jae-in in March ordered an investigation into alleged prostitution at a K-pop star's nightclub, a probe that has already ensnared prominent entertainers, business executives and government officials. Moon also ordered a separate probe into 13-year-old allegations that former vice justice minister Kim Hak-ui received sexual services arranged by a construction contractor in return for business favors, reported Korea's Yonhap News Agency.

"It's snowballing to reveal all the ailments of Korean society," UCLA's Kim said.

Lee Seung-hyun, better known as Seungri, formerly a member of South Korean boy band Big Bang, arrives at a police station in Seoul, South Korea, on March 14, 2019, to be questioned over charges of supplying prostitution services to potential investors in a nightclub he co-owns. Getty Images

"You raped her haha"

The scandal ripped open when police in February began investigating Lee Seung-hyun, better known as Seungri from the K-pop boy group Big Bang. Seungri, 28, allegedly procured sexual escorts for business investors in the Burning Sun nightclub in Seoul's affluent Gangnam district, according to local Korean news outlets. Seoul Metropolitan Police Agency said Monday it has confirmed the allegations, reported newspaper Chosun Ilbo.

Police began investigating Seungri, who owns a stake in the Burning Sun nightclub and is member of its management team, as part of a larger probe into Burning Sun following allegations that staff were drugging and videotaping female customers, reported Yonhap. A 28-year-old man claimed that he was beaten by nightclub staff and police officers last November after he tried to defend a woman from being manhandled in the nightclub.

Seungri denied the allegations of procuring prostitutes for foreign investors, but the investigation into the music star found that he was part of a group chat through Korea's messaging app KakaoTalk with other celebrities who shared spycam video clips of women who were filmed without their knowledge, reported Korean broadcaster MBC News.

South Korean pop star Jung Joon-young performing in 2013. He was arrested last month on charges he had shared in a chat room video clips of at least 11 women he secretly filmed in sex acts, reported Yonhap News Agency. (Republic of Korea) AFP/Getty Images

"You raped her haha," read one message from Korean singer-songwriter Jung Joon-young to the members of the chat room, reported broadcaster SBS News. The discovery of the group chat led to Jung's arrest on March 21 on charges he shared clips of at least 11 women he filmed in sex acts, reported Yonhap.

"I am sorry. I made a big and inexcusable mistake, and I admit my guilt," Jung said in a public apology after his hearing. "I will live my days repenting for the sins," Jung continued.

Other prominent K-pop stars in the group chat include Lee Jong-hyun from boy band CNBlue and Choi Jong-hoon from the group FT Island, according to Yonhap. The men have at turns apologized on social media and in public, announced departures from their management companies, and promised cooperation with investigations, Yonhap reported.

Seungri apologized for the group chat scandal and announced his departure from K-pop in early March. The youngest Big Bang member debuted when he was 15 and helped the pop group sell more than 140 million records for its management company, YG Entertainment, and generate nearly 6 billion total views on YouTube.

"I am very grateful to all the fans in Korea and abroad for their love for the past 10 years, and I think this is where I stop even if it's for the sake of YG Entertainment and Big Bang," read Seungri's Instagram apology in Korean.

Lee Seung-hyun, left, and fellow members of Big Bang at the MTV Europe Music Awards on Nov. 6, 2011. Getty

"Jang's List"

It's not the first time that prostitution scandals have rocked Korea's entertainment industry.



The outcry over the latest scandal prompted the South Korean president to also reopen a 10-year-old suicide case by Korean actress Jang Ja-yeon, who left detailed notes about the sexual abuse she endured in the entertainment industry before she hanged herself in 2009, local news accounts reported. The actress accused her management of forcing her to give sexual favors to 31 prominent business moguls, government officials and journalists, according to the Korea Times.

The names were never released, leaving many South Korean citizens suspecting a cover-up and clamoring for the release of "Jang's List," the Korea Times reported. A petition calling for a new investigation of the actress's case has gathered more than 600,000 signatures, the news outlet said.

The late Korean actress Jang Ja-Yeon in 2009. Getty

K-pop experts said the Jang story is indicative of the control that Korean entertainment companies cast over the lives of employees, even those who've found success, micromanaging their weight and plastic surgery for their faces and even controlling whether they can date, lest their fans get upset.

For years, K-pop entertainers were forced to sign what Koreans call "slave contracts" that determined the length of their tenure with a company often without pay, according to Yonhap. The practice has diminished since South Korea's Fair Trade Commission forbade the practice in eight of the country's leading entertainment companies back in 2017, Variety reported. This included the "Big Three" K-pop entertainment companies: YG Entertainment, JYP Entertainment and SM Entertainment.

Some K-pop stars, who may have forgone a high school or college education, have resorted to sex work after aging out of the industry, according to industry veterans, including Youtube user Grazy Grace, who has taken to the platform to discuss her experience and knowledge of the K-pop industry.

#MeToo moment of reckoning

The nightclub scandal and emergence of the chat room messages seems to have been a breaking point for many Korean women who have also been dealing with a nationwide spycam epidemic that revealed thousands of 1-millimeter minicams popping up in hotels and offices and restrooms across the country. An estimated 20,000 Korean women last summer marched in rallies to protest the social problem, crying, "My life is not your porn."

There were more than 6,000 cases of secret videotaping reported in the country in 2017, the BBC reported. Of more than 5,400 people arrested, fewer than 2 percent were sent to jail. Critics say police bribery has helped perpetrators avoid prosecution.

In Seungri's and Jung's chat room, the young women in their 20s were not aware that they were being filmed and pleaded with the men to delete the videos, according to SBS News reporter Kang Kyung-yoon, who reported on the chat room.

"Some of them begged, 'Please save me. How do I live after this?'" Kang said of the women in an interview with HuffPost Korea.

Yang Hyun-suk, left, the founder and chairman of YG Entertainment, and his brother and YG's chief executive officer Yang Min-suk, right, share a champagne toast in 2014 with Ravi Thakran, chairman and managing partner of L Capital Asia. Getty

For the entertainment companies, the scandal may be a moment of reckoning. All have denied wrongdoing and have distanced themselves from stars who have been implicated. Shares in YG Entertainment, which manages Seungri's Big Bang, have fallen 27 percent since news of inquiries into Burning Sun emerged in January. Yang Min-suk, the CEO of YG Entertainment, has kept his job after surviving a shareholder vote last week to remove him, reported Yonhap.

"I take those cases very seriously. (I) will faithfully cooperate with the relevant authorities in charge of investigations," Yang said before the shareholder's meeting. His brother Yang Hyun-suk, the founder of YG Entertainment, remains as chairman.

The future remains unclear for the embattled company, however. South Korea's tax agency launched a probe into YG Entertainment for alleged tax evasion, reported Yonhap, citing evidence that founder Yang Hyun-suk owned a different nightclub in Seoul that he registered as a restaurant to avoid higher business taxes.