Large Corporations Distance Themselves From ASTRO’s Cha Eunwoo Amid His Tax Evasion Scandal

This article is part of our coverage of Cha Eunwoo's Tax Evasion Scandal. You can read more and view the entire timeline here.

The advertising industry is increasingly distancing itself from ASTRO member and actor Cha Eunwoo, who is under suspicion of tax evasion involving ₩20.0 billion KRW (about $14.0 million USD). Following beauty, finance, fashion, and education sectors, even large corporate affiliates have chosen to sever ties, indicating the seriousness of the matter.

According to OSEN on the 27th, SSG.com changed videos featuring Cha Eunwoo, whom they appointed as an exclusive beauty model last year, to private on their YouTube channel. Although they did not disclose the reason for making the videos private, it is assumed to be a reaction to the tax evasion allegations involving ₩20.0 billion KRW (about $14.0 million USD).

This is not the first time ads with Cha Eunwoo have been cut off due to the tax evasion suspicion. Skincare brand Abib also made his advertisement videos and posts private, followed by the same moves from Shinhan Bank, Marithé François Girbaud, Daesung MyMac, and others in finance, fashion, and education. Notably, even after Cha Eunwoo and his agency Fantagio issued a statement, SSG.com continued to make ads private, and the Ministry of National Defense also took down content featuring Cha Eunwoo as a storyteller on the YouTube channel “KFN Plus,” making it private.

South Korean Defense Ministry Severs Ties With ASTRO’s Cha Eunwoo

Last year, the Seoul Regional Tax Office’s Investigation Division 4 conducted a high-intensity investigation targeting Cha Eunwoo over tax evasion suspicions linked to a one-person agency established by his mother. It is reported that Cha Eunwoo’s income was evenly divided among Fantagio, the one-person agency, and himself through service contracts supporting his entertainment activities.

However, the National Tax Service regarded the one-person agency set up by Cha Eunwoo’s mother as a paper company that did not provide any actual services. The tax office found that Cha Eunwoo and his mother established a corporation and divided income to reduce income tax by 45%, using a loophole to apply a corporate tax rate 20 percentage points lower than the income tax rate.

In response, Cha Eunwoo’s side stated, “The main issue in this matter is whether the corporation established by Cha Eunwoo’s mother is subject to actual taxation. This is not a finalized or notified matter, and regarding the interpretation and application of the law, we will actively clarify the issues through proper procedures. The artist and tax representatives will sincerely cooperate to ensure the process concludes promptly.”

Four days after the controversy arose, on the 26th, Cha Eunwoo expressed, “I sincerely apologize for causing concern and disappointment to many people due to recent issues related to me. This has become an opportunity for me to deeply reflect on whether I have been sufficiently strict in fulfilling my duty to pay taxes as a citizen of the Republic of Korea.” Fantagio also added, “We will review our artist management system again due to this matter and will strengthen and supplement necessary systems to prevent similar controversies from recurring.”

ASTRO’s Cha Eunwoo Personally Speaks Up About Tax Evasion Controversy

On the 27th, Fantagio released another statement saying, “The current issue is under investigation by tax authorities to confirm the facts. Both the agency and artist are fully cooperating within the necessary scope. If legal or administrative decisions become clear, we will responsibly take necessary actions based on the results. We earnestly request refraining from baseless speculation, spreading unverified information, and excessive interpretations regarding the claims and suspicions raised.”