Jun Won Corporation Responds To Reports Of Embezzlement And Owning Burning Sun
Jun Won Corporation has issued a statement in response to reports suspecting the company of embezzlement.
Jun Won Corporation is the company that previously manged Le Méridien Hotel, where Burning Sun is located. It was reported that Jun Won Corporation invested around 1.2 billion won (approximately $1,077,810) into Burning Sun.
On April 12, Jun Won Corporation stated through a press release, “We are here to report that suspicions of Jun Won Corporation’s embezzlement are not true.”
The company first denied a report made by MBC’s “Newsdesk” on April 11, which stated that Jun Won Corporation had rented out 1,000 square meters of space to Burning Sun at a monthly payment of 16.66 million won (approximately $14,700). MBC stated that police had found Burning Sun paying over 100 million won (approximately $88,200) in rent money, which is six times the initial amount. According to the report, police launched into an investigation as they suspected that this money was not for rent, but instead money that diverted Burning Sun’s profits to Jun Won Corporation. It was also reported that the scale of Jun Won Corporation and Seungri’s embezzlement amounted to 600 million won (approximately $529,000)
In response to this, Jun Won Corporation stated that because it normally takes a business at least six months to get to a stable state after its opening, the initial rent for Burning Sun was set at 16.66 million won. Three months after Burning Sun’s opening, however, the monthly rent was raised to 100 million won to meet the market price of the surrounding area. Jun Won Corporation explained that this rent was issued monthly based on rental sales, and that Burning Sun also properly handled the accounting through a bank account for the rental payments. According to the company, this information can be found in the National Tax Service’s records as well.
Jun Won Corporation also added that the allegations of the company receiving Burning Sun’s profit “dividends” in the name of “rent” was not true, as if it really were the dividend, it should vary in proportion to monthly sales. However, the rent received by Jun Won Corporation was fixed at 100 million won per month.
The company then explained that it did not give Burning Sun favorable treatment by initially setting the rent at 16.66 million won, and that the rent was raised after mutual agreement. It also revealed that the company was investigated by the police on April 11 and would participate in future investigations if needed, while actively addressing any suspicions that are untrue.
Jun Won Corporation clarified that it had not been involved in the management of Burning Sun, and that the rumors of it being the de facto owner of the club are not true either. It had only invested in Burning Sun Entertainment after highly regarding Seungri’s business value.
In regards to its lease with Burning Sun, which had been upheld from late December 2017 to February 2018, Jun Won Corporation revealed that the ongoing issued had caused investment losses. Due to this, the company terminated its contract with Burning Sun and requested procedures for corporate liquidation.
Jun Won Corporation concluded it will take legal actions against reports stating that Jun Won Corporation was the actual owner of Burning Sun, and said that the Le Méridien Hotel chain had nothing to do with the Burning Sun issues.
On April 11, Seungri and former Yuri Holdings CEO Yoo In Suk were booked on suspicions of embezzling funds from Burning Sun.