Prosecutors have requested an arrest warrant for Cha Ga-won, CEO of the entertainment label One Hundred and chairperson of the PIARC Group, who is facing allegations of fraud amounting to tens of billions of won.

The Seoul Central District Prosecutors Office announced on the 28th that it requested an arrest warrant for Cha on charges including fraud under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. The warrant, filed with the Seoul Central District Court, follows the third arrest warrant request submitted by the Financial Investigation Unit of the Seoul Metropolitan Police Agency's Metropolitan Investigation Bureau on the 22nd.

Cha is accused of proposing a business utilizing the intellectual property (IP) of celebrities signed to her management agency to the listed company Nomus, signing a contract, receiving an advance payment of 24.2 billion won, and failing to fulfill the business obligations.

Police suspect that Cha concealed the fact that her contracts with other companies would not expire anytime soon from Nomus, entered into a double contract, and was unprepared to carry out the business at the time of the agreement.

Police had previously applied for arrest warrants twice, in early June and on the 15th, but prosecutors rejected both requests, citing the need to supplement the construction of criminal facts.

At the time, Hyun Dong-yeop, an attorney at Law Firm Hageum representing Cha, stated in an official release, "The revisions to the Criminal Procedure Act adjusted investigative authority, and the adverse effects of police-concentrated investigation powers have been revealed through these warrant rejections. Even though the accusation itself does not constitute a crime, illegal investigations predicated on referral for arrest have been conducted," showing confidence that the arrest warrant would be dismissed, going as far as putting his career as a lawyer on the line.

According to reports, ahead of the third application, prosecutors and police consulted to conduct additional investigations, including tracking Cha's bank accounts and analyzing contractual relationships. Through this process, circumstances were reportedly uncovered indicating that Cha started the entertainment agency while holding massive debts and subsequently engaged in rolling over debts by splitting contracts.

The total scale of damages identified by police reaches approximately 30 billion won, combining the 24.2 billion won related to Nomus with an alleged 5 billion won lease fraud scheme. Cha's side has completely denied the allegations, maintaining the stance that various suspicions surrounding One Hundred were raised in the process of a hostile merger and acquisition (M&A).

The court is expected to schedule a pre-trial detention hearing (warrant substantive examination) as early as this week.

 

(Photo courtesy of SBS E&S / Reported by Kang Kyung-yoon)