Korean talent agency cuts IPO size after key star’s drug scandal

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Korean talent agency cuts IPO size after key star’s drug scandal


Korean talent agency YG Entertainment, which manages the popular boy band Big Bang, has cut the size of its planned initial public offering, citing a drug scandal involving a key star as a risk factor.

YG said a recent incident involving marijuana consumption by prominent Big Bang member Kwon Ji-yong, 23, or G-Dragon, could curtail the band’s activities and hurt the company’s operations.

Kwon, known for his dance moves and flamboyant, hip-hop inspired fashion, claimed to have consumed marijuana accidentally after taking a few puffs of what he thought was a cigarette at a party in Japan in May.

Only trace amounts of the drug were found in his system and it was his first drug-related offense. Subsequently, prosecutors in Korea decided not to charge him.

“We cannot completely rule out similar mishaps occurring again in future and it is a risk factor that could directly affect our finances and management,” YG said in a filing late on Tuesday.

YG is now seeking to raise as much as 35.9 billion won ($31.3 million), 10 percent less than the amount it was seeking initially, with shares expected to begin trading in late November.

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