The entertainment industry is sounding alarms about "family-run management." Family corporations set up with the intent of managing assets based on absolute trust and protecting artists are instead turning poisonous.
At the center of the recent scandals that shook the entertainment industry — Cha Eun-woo's alleged tax evasion in the 20 billion won range and Park Na-rae's alleged power abuse and embezzlement — is commonly a "company with the mother as CEO."
Cha Eun-woo recently received a notification from the National Tax Service of a record tax reassessment exceeding 20 billion won. The National Tax Service judged "Company A," established by Cha Eun-woo's mother, Ms. Choi, into which part of his income flowed, to be a paper company with no actual service provider. Critics say it was a scheme to apply the lower corporate tax rate to avoid up to 45% income tax.
Cha Eun-woo's camp said, "This matter centers on whether the company established by Cha Eun-woo's mother falls under the scope of substantive taxation, and it is not a matter that has been finally determined and notified. We will actively explain the issues related to tax law interpretation and application through proper procedures," and chose to confront the issue head-on.
Although the claim is that the mother directly performed management duties as a "formal company" to protect the artist, the family corporation is not free from criticism for being used to distribute income.
Broadcaster Park Na-rae's one-person agency, "An Park," established by her mother, also became the core of the conflict. Former managers accused Park Na-rae of using An Park's funds for private purposes such as her ex-boyfriend's salary and key money for a jeonse lease, and filed criminal complaints on embezzlement charges.
In addition, suspicions that Park Na-rae's mother received wages without actual work further put the opaque operating methods of the "family company" under scrutiny.
Park Na-rae's side denied the former managers' claims and countersued those managers for extortion, and the agency emphasized, "After receiving severance pay, they demanded an amount equivalent to about 10% of the company's previous year's sales," calling the allegations about the ex-boyfriend's salary "inflated falsehoods" and saying, "They are pressuring us with absurd claims."
The reasons celebrities set up family companies are clear. They entrust asset management to family members, who are more trustworthy than others, to maximize revenue and protect their privacy. But these incidents revealed the darker side. It is easy for various side effects to occur, such as lack of expertise, blurred lines between personal and professional matters, and failures in risk management.
Ultimately, the Cha Eun-woo and Park Na-rae cases show that the justification of having a trustworthy family does not easily replace an objective professional system. Their cases, which are paying the harsh price of tax investigations and legal battles, warn many celebrities who run one-person agencies or family corporations that building systems and transparent management are necessities, not options.
[Photo] OSEN DB
[OSEN]