Park ‘Ruler’ Jae-hyuk has become embroiled in a tax avoidance controversy.

According to a petition for adjudication made public through the National Tax Law Information System, the National Tax Service concluded that the labour costs Park paid to his father, as well as a stock title trust arrangement between the two, amounted to tax avoidance. Park’s side challenged the decision by filing a petition with the Tax Tribunal, but the appeal was ultimately dismissed.

The tax authority said it could not recognise the payment to Park’s father as a necessary business expense because no documentary evidence was submitted to prove that he had actually performed managerial duties. It also found that there was insufficient proof that the stock title trust had no tax avoidance purpose, and said the resulting tax reduction could not be treated as negligible.

As the controversy intensified, SUPERGENT, the agency representing Park, issued a statement on its official social media channels saying that the matter stemmed from administrative shortcomings in the process of managing assets. The agency maintained that there had been no genuine intent to make a gift, but said gift tax of a punitive nature had been triggered by the title trust arrangement and had already been paid in full.

Meanwhile, the LCK said it is currently reviewing the matter internally and working to confirm the facts.

This article was translated from the original that appeared on INVEN.