JYJ Junsu Sells His Hotel For Profit, Employees Outraged At Unfair Treatment

JYJ‘s Junsu is embroiled in a controversy just days before he enlists in the South Korean military after workers from his hotel came forward claiming mistreatment and poor working conditions.

Employees from JYJ’s Junsu’s hotel have come forward alleging poor working conditions and their discomfort at the hotel’s management style.

Junsu opened his hotel, Toscana Hotel, in September 2014 on the island of Jeju, South Korea. In the past, Junsu has revealed that it has been a life-long dream of his to own a hotel and that he loved the island of Jeju.

However, it’s now been revealed that the hotel was sold to a real estate company on January 7, 2017. Junsu sold his hotel for a total of ~₩24 billion KRW ($21 million USD) for a net profit of ~₩3 billion KRW ($2.62 million USD).

Since the sale, employees have come forward with multiple allegations of financial grievances. The employees have claimed they are missing wages, been paid late in the past, received no retirement fund and have had zero communication from management.

Dispatch has now released an exclusive investigative report detailing the grievances of employees at Junsu’s Toscana Hotel.

The Toscana Hotel — A Family Run Hotel

The Toscana Hotel is located in the Seogwipo area of Jeju Island. The hotel was freshly built on the land Junsu purchased in January 2011 for the amount of ₩1.72 billion KRW ($1.5 million USD). ₩15 billion KRW ($13.1 million USD) was then borrowed from the bank to build the hotel.

The hotel is composed of 61 rooms in the main four-story building and four villa suites in the outdoor area of the hotel. The largest swimming pool in the whole island of Jeju is also located at this hotel.

Management of the hotel is completely family-run. Junsu’s father Kim Jin-Seok is the hotel Chairman, his brother Kim Moo Young is the CEO, his unnamed aunt is the business manager and his unnamed cousin is listed as the manager.

Documents show the employee listing of Junsu’s Hotel is completely run by his family.

Employees revealed that due to the family run environment of the hotel, the financial infrastructure of the hotel was somewhat questionable. For example, Junsu’s personal bank account was the designated account for all hotel accommodation fees, and there wasn’t a separate bank account for the hotel.

“Delayed salaries for over three weeks.”

The hotel’s management style was extremely poor according to employees that spoke with Dispatch. Employees claimed that the management did not ensure steps were taken to maintain the well-being of the hotel and the employees. They claim there was minimal interest towards matters that did not directly involve or concern the family, even if it was regarding the employee’s salaries.

Employees complained that their monthly wages were often extremely late and caused mistrust between the employees and the managerial staff.

“I have never been paid on time for my monthly salary. I have always had my salary delayed for at least 20 days.”

— Anonymous Employee

Dispatch confirmed the shocking confession made by the employee through documents presented as proof. During the following months and years – the employee did indeed have a delay in payments for at least three weeks.

Payments made in December 2015 and the months of February, March April, July, October, November, and December in 2016 were late. 

One employee submitted documents to Dispatch that proved payments for his salary were indeed late numerous times.

A text message allegedly from the Toscana Hotel Management was also shown to Dispatch, as evidence of the employee’s claims. The text message reads as follows:

*Announcement*

Thank you very much for your continued hard work. The hotel is going through some financial hardships so this is a text message to annouce that salaries will be delayed.

Please understand the stituation.

We will work hard to get your salaries sent [to you] as soon as possible.

— Toscana Hotel Management

Due to the continued delay in salaries, the employee confessed that they had to rely on credit cards to get by. They went on to reveal that because of continuous delays by the hotel to pay their salary, they were unable to make payments on the card in time.

Furthermore, banks denied loans to this employee because of their poor credit score resulting from late payments due to this incident.

January sale of the hotel and unknown job security for employees.

Through the public records of land registration on Jeju Island,  Dispatch confirmed the sale of Toscana Hotel to a real estate developer on January 7, 2017. The transfer of ownership is still under process as of February 7, 2017.

Employees were not given a formal notice regarding the sale of the hotel and only found out nearly a month after the sale. Employees are concerned that after ownership of the hotel has been transferred, their continued employment may be uncertain.

Also, Toscana Hotel did not have a proper retirement fund process ready for employees. One worker stated that an employee who was set to retire had their official retirement delayed for nearly six months before being paid. The employee in question only received their retirement pay after threatening to report the hotel to the labor department.

Junsu’s impending military enlistment and the future of Toscana Hotel

Junsu is set to enlist in the military on February 9, 2017, where serve for nearly two years before returning to civilian life.

Dispatch contacted Junsu’s agency, C-JES Entertainment, and Toscana Hotel for a response but failed to get a clear answer to the issue at hand. His agency responded with the following when contacted:

“This is a personal issue of our artist, Junsu. Our agency has no relation to the hotel [or its] management, so details regarding this matter should be directed towards the hotel.”

— C-JES Entertainment

Update: Seven hours after Dispatch released the investigative report, the Toscana Hotel released an official statement to express their position and Junsu’s position on the issue.

Below is a full translation of the statement issued by the Toscana Hotel.

“We would like to address Kim Junsu’s official position on the sale of the Toscana Hotel through this statement today.

First of, we would like to point out that Kim Junsu’s sale of the Toscana Hotel was not an immoral act as painted by the media today. It was rather an inevitable act to prevent the worst from happening.

Sale of Toscana Hotel

The process of selling the hotel will be fully explained. The Toscana Hotel has been growing thanks to the support of our many customers over the years. Unfortunately, it fell under a financial hardship recently. It was too difficult to continue with normal operations due to the overlapping situations of employee wages, the monthly large-scale interest payments and the hotel’s low season.

Even with these overlapping situations, Kim Junsu has been working towards a grand solution. A large portion of the hotel’s operating expenses has been covered by Kim Junsu’s personal income and investment. However, due to his impending military enlistment, this solution cannot be a long-term one.

Furthermore, due to all these problematic situations – time was an important factor at play. There was little time, and the problems kept growing larger with each passing day. We were worried the auction with the real estate company would be in jeopardy if we didn’t act fast. In order to avoid a dire situation, Kim Junsu acted fast and sold the hotel to a professional manager who knows and understands how to maintain the hotel better than himself.

This sale does not mean that Kim Junsu is completely out of the picture in regards to the hotel’s affairs. Kim Junsu will be more involved thanks to the conditions of the hotel’s sale. Until now, he has been participating with the hotel through his family – with the sale’s completion, Kim Junsu will personally be a part of the hotel’s affairs as a joint stakeholder.

Employee Wage Issue

At the current period of time, there are absolutely no pending wages. All employee of the Toscana Hotel has been paid for. It is true that there were delays during the hotel’s time with financial hardships. We would like to clarify that there are no overdue matters regarding wages. Any and all pending employee salaries were paid after the completion of the hotel’s sale. Additionally, retirement benefits and dismissal benefits have been paid in full as well.

As mentioned previously, completion of the hotel’s sale was the most immediate urgency. That was the most pressing matter, and that is why we also conducted conditions with the new owner. Most employees will be keeping their current jobs, and the buyer will try their best to accommodate as many employees. Employees will remain unconditional employees for the initial two months, and during that time, they are free to stay or leave the hotel. The salaries will be paid by the new buyer.

Kim Junsu has done the most he can to make the best out of this situation. He has made incredible personal investments to alleviate the transitioning process. The hotel has suffered a lot of financial losses to prevent the worst from happening. Through this hard process, it was possible to give employees retirement benefits.

Personal Bank Account Deposits

Lastly, many media outlets have raised questions regarding the direct payments to Kim Junsu’s bank account for accommodation fees. To address this point, the Toscana Hotel is a private business of Kim Junsu. It is not owned by a corporation. Therefore, all transactions were made through Kim Junsu.”

– The Toscana Hotel

Junsu is currently at home, preparing for his military enlistment making arrangements for his possessions for the next two years.

Source: Dispatch E Daily

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