Musinsa, a fashion platform pushing for an IPO, was found on the 3rd to have been hit with fines and enforcement penalties totaling 170 million won in 32 cases over the past three years and six months by the Seongdong District Office in Seoul, where its headquarters is located. Most were due to outdoor advertisements centered on large banners installed without filing.
According to Musinsa's 2026 semiannual report, Musinsa received 32 administrative sanctions from the Seongdong District Office from 2023 through June this year. Of these, 31 cases totaling 168 million won were violations of the Outdoor Advertisements Act, and the remaining one case was a violation of the Building Act.
The imposed amounts swelled each year. They rose from 14 million won in 2023 to 25 million won in 2024 and 43 million won in 2025, and this year 88 million won was imposed in just the first six months. That is more than the combined total of the previous three years. The number of violations also increased from two (2023) to four (2024) and 12 (2025), and 14 cases were caught in just the first half of this year.
The Outdoor Advertisements Act classifies large advertisements installed on exterior walls as "wall-mounted signs" and requires obtaining permission from, or filing with, the competent district office before installation. Standards are also set for display area, number of floors, and size relative to building width. As a rule, the advertisement content is limited to the trade name, trademark, or business details of the person using the building.
There are also signs that corrective orders were not followed. Musinsa was imposed enforcement penalties of 10 million won twice on Sept. 1 and 11 last year for "illegal installation of wall-mounted signs." Enforcement penalties are levied when the district office issues a corrective order to remove the advertisement but it is not carried out, and they differ in nature from fines imposed for unfiled installations. In April this year, Musinsa was also imposed an enforcement penalty of 2 million won for violating the Building Act after being caught performing a major renovation of a building without filing.
Musinsa has been clustering stores around Seongsu-dong 2-ga in Seongdong District, building what is called "Musinsa Town." Exterior wall graphics and large temporary façade productions have been marketing tools Musinsa has frequently used in the process. However, it turns out a considerable number did not go through filing procedures.
The timing also stands out. To prepare for listing, Musinsa passed "establishment of compliance control standards" and "appointment of a compliance officer" side by side at its board meeting on Feb. 13 this year. But all 14 cases caught this year were concentrated in March to June, after this board meeting. Even after disclosing it had established an internal control system, violations instead increased.
Musinsa spent 66.6 billion won on advertising and promotion in the first half of this year. The 88 million won in fines paid to the Seongdong District Office during the same period amounts to 0.13% of the ad spend. This raises the point that fines attached to illegal advertisements may effectively have been borne as part of marketing expense. A distribution industry official said, "It is hard to imagine at large corporations to calculate regulatory sanctions as costs. It is essentially brazen business."
Musinsa has Korea Investment & Securities Co., KB Securities, Citigroup Global Markets, and JPMorgan as underwriters and is coordinating a preliminary listing review filing in the third quarter. In the Korea Exchange (KRX) review, internal controls and management transparency are among the key inspection items.
As illegal advertisements in the Seongsu-dong area have been slow to decrease, the Seongdong District Office said it strengthened enforcement standards starting this year. Previously, it issued corrective orders and allowed time for self-remedy before taking action, but beginning this year it switched to imposing fines immediately upon on-site detection. A district office official said, "Illegal advertisements by multiple companies, including Musinsa, are increasing and taking diverse forms, making enforcement difficult."
The Seoul Metropolitan Government also appears poised to crack down on habitual outdoor advertising violations by corporations that damage the cityscape. On July 10, Seoul proposed to the Ministry of the Interior and Safety raising the number and amount of enforcement penalty impositions from the current twice a year with a maximum of 5 million won per instance to five times a year with a maximum of 20 million won. The intent is to ensure the penalties exceed the economic gains from violations and to raise the effectiveness of sanctions to a level that substantively deters repeat violations. Seoul also announced a policy that if a district office does not file a complaint against habitual or willful violators who continue to receive repeated enforcement penalties without correction, the city will file a complaint directly.
A Musinsa official said, "The issue arose during preparations for large-scale outdoor advertisements intended to support the marketing of brands housed in our stores while running large campaigns," adding, "We will work with the relevant authorities to comply with regulations related to installing outdoor advertisements."