The Kang Ho-Dong Scandal – Cui Bono?

The writer gives a good review regarding Kang Ho-Dong’s tax evasion scandal in this article. I like how the writer summarize it all.

WRITTEN BY  ON SEPTEMBER 12, 2011

Well, folks, it looks like the premature postmortem we had on 1N2D was not so premature after all, courtesy of Korea’s National Tax Service. The mother of all PR-bombs went off on Friday, with Kang Hodong holding a tearful press-conference and voluntarily withdrawing from all entertainment-related activities. For how long? According to Kang Hodong’s statement – indefinitely.

This capped quite a a stressful week for Kang Hodong, that started with leaked revelations that he was being investigated and fined for alleged tax evasion.  His agency then shifted into damage-control mode, revealing that the investigation had been ongoing for quite some time (around 5 months, to be exact), and that during that time Kang Hodong’s legal representatives were working with National Tax Service to resolve the issue. To make matters worse for Kang Hodong, an anonymous “businessman” filed a complaint with Seoul’s Public Prosecutor’s Office requesting a criminal investigation of the entertainer.

Let me first begin with full disclosures:

1. The editorial board of Seoulbeats does not condone tax evasion: in fact, quite the opposite. As vital public services are dependent on tax revenues, it is highly important for citizens to take their duties as taxpayers seriously.

2. We also tend to gravitate away from conspiracy theories of all shapes and stripes. Our tinfoil hats were thrown out during last spring cleaning, and I have promised the editors to limit my reading of George Orwell to only 2 hours a day.

3. The writer is not a particular fan of Kang Hodong or his style of MCing.

Having said that, this whole saga stinks to high heaven, and the culprit is definitely not a cat litter box.

Somehow, Kang Hodong does not strike me as the Korean version of Al Capone, Leona Helmsley or Wesley Snipes. While his income is the source of many a netizen envy, it simply confirms the fact that he is a very successful entertainer, whose MCing services, TV programs and commercial endorsements are in high demand. Rather, as a self-employed individual, he enjoys the advantage of many artists/entrepreneurs/impresarios around the world – the write-off of business-related expenses on his tax returns.  And as many an entertainer  (and ordinary citizens, for that matter) around the world find out, oftentimes tax authorities beg to differ as to what constitutes a legitimate business expense. While the reported amount of underpayment, penalties and fines stands at an impressive $700,000, given his success and earnings potential, it does not strike me as extraordinarily high. Moreover, we do not know how many years of tax returns the audit covered, so this amount could be a sum of several years’ worth of audit.

I highly doubt that Kang Hodong possesses good knowledge of Korean tax laws, let alone prepares his own tax returns. That is usually done by tax professionals, and the final return is presented to the client for signature. While Kang Hodong did the right thing by acknowledging the mistake and taking full responsibility, blaming him for masterminding and solely executing an alleged tax evasion scheme is utterly ridiculous. Kang Hodong’s name might be on a tax return, but the prep work, write-offs and the actual filings were most likely done by some inconspicous accountants, whose names are of no consequence to the trigger-happy netizens.

What is interesting about this whole situation is that Kang Hodong’s name was leaked by someone with the knowledge of investigation. Such leaks clearly violate privacy laws and are conveniently coming at the time of hightened interest in Kang Hodong’s persona due to his negotiations and subsequent agreed-upon future departure from 1N2D. This is also coinciding with wildly-inflamed speculations in the press and in blogs as to the amount of money Kang Hodong is making – the figures thrown around vary from $2 to $10 million a year. Top it off with increased guestimates as to what his future contract might have paid him, and it seems as if a well-organized campaign is underway with a stated goal: to run Kang Hodong out of the business as a punishment for going solo and daring to negotiate independently for a bigger pay-day. So far, it seems that the campaign has worked like clockwork.

Not convinced? Then how about making a bet that Korean Taxpayers Union’s request to investigate the source of Kang Hodong tax problem leak will go unanswered? Since the investigation was going on for quite a while, why leak the news now, and not, say, 2 months ago? And will we ever know the true identity of a douche cutely named ”businessman citizen A.” whose precise knowledge of Kang Hodong’s income, impeccably-expedient filing of a complaint and holier-than-thou fury all seem a wee-bit too righteous?

But the biggest and creepiest players in this still-unfolding drama are the ubiquitous netizens themselves. Just a couple of weeks ago, Kang Hodong was the darling of South Korea, the irreplaceable host of successful variety shows, and one of the most trusted entertainers in the country. The amount of vitriol and hatred that had befallen Kang Hodong since the news of tax problems broke out is simply astounding to the point of requiring country-wide administration of rabies vaccine to the entire population of South Korea. In fact, it seems that the massive amounts of that hatred combined with fever-pitch speculative reporting of South Korean press is what pushed Kang Hodong to announce his indefinite retirement.

While I do not agree with his decision, I can understand and respect where he is coming from: as a man, a husband, a father and an athlete his goal is to protect his loved ones and attempt to stop the incessant vile. However, I wish he would remember his sports training and realize that offense is the best defense. Many an entertainer’s reputation and livelihood had been ruined by self-righteous and posessive netizens, spewing their vitriol behind Internet’s assumed anonimity: just remember what Lee Ji Ah had to endure a few months ago. Sorry, netizens, your idols do not owe you their first-borns, and it might be high time for you to hightail out of PC-bang and go on that bike ride we talked about in the last article. Otherwise, another celebrity might work up the gall to actually drag a few of the rabid loudmouths to court and deprive them of their lunch-money for a few years to come.

cr: http://seoulbeats.com/2011/09/the-kang-ho-dong-scandal-cui-bono-2/

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About joenjohana

I'm crazy about Kdrama, Lee Seung Gi and Ha Ji Won.
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