Cha Ga-won, CEO of Onehundred. MBC screen capture

The police have applied for a detention warrant for Cha Ga-won, head of the Onehundred label, an entertainment agency, on suspicion of fraud in the 30 billion won range ($22,500,000 (30,000,000,000 KRW)). Amid continuing internal turmoil following a series of disputes with key figures and affiliated artists including MC Mong and Lee Seung-gi, the addition of large-scale fraud allegations has left the company cornered on all sides.

According to Yonhap News on the 15th, the Financial Crime Investigation Division of the Seoul Metropolitan Police Agency recently applied for a detention warrant for Cha on suspicion of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, among other charges. The prosecution is reportedly carefully reviewing whether to request the warrant.

There are two main allegations against Cha. First is the alleged misappropriation of advance payments totaling 24.2 billion won from Nomus Co., Ltd. ($18,150,000 (24,200,000,000 KRW)). Police believe Cha proposed to Nomus a project using the intellectual property (IP) of artists affiliated with his company, signed a contract, and pocketed a massive advance, while in reality lacking the intent or ability to carry out the project.

In particular, police suspect that even though there was no prospect that a prior IP contract with another company would end anytime soon, Cha concealed this from Nomus and entered into a duplicate contract, indicating a strong intent to deceive.

Separately, an alleged real estate fraud in the 5 billion won range has also been added. Cha allegedly proposed to an acquaintance, “Let us enter into a jeonse lease for the homes each of us owns,” obtained 5.4 billion won as a deposit ($4,050,000 (5,400,000,000 KRW)), and then failed to keep his promise to perform his own side of the jeonse lease.

On top of controversy over management's moral hazard, internal disputes at the Onehundred label over management control and exclusive contracts have surfaced. Cha is currently engaged in all-around conflicts with key figures, including MC Mong, who helped plan the agency's founding, and flagship artist Lee Seung-gi, making it difficult to find a breakthrough inside or outside the company.

Meanwhile, Cha's side, now on the brink of detention, has strongly opposed the police investigation. A representative for Cha told Yonhap News, “It is deeply regrettable that the police have pushed ahead with a detention warrant application even though illegality was identified during the search and seizure process and a quasi-appeal has been filed with the court,” adding, “We plan to file a petition with the National Human Rights Commission on the grounds that the investigation team leader and investigators violated human rights during the investigation.”