Puff The Magic G-Dragon

G-Dragon, the leader of the popular K-pop boy band Big Bang, allegedly smoked marijuana and got caught on a drug test during a tour of Japan in May.

South Korean prosecutors decided not to indict the singer, whose real name is Kwon Ji-yong, after concluding he did not intend to smoke marijuana when he accepted a cigarette from a fan thinking it contained normal tobacco.
According to the singer, he took “two or three puffs” before tossing the joint into a toilet.

G-Dragon, who is also a successful songwriter and producer, is one of the biggest earners for the major Korean talent agency YG Entertainment.

In fact, Big Bang and its various related activities accounted for more than half of the company’s total sales in 2010.
The drug scandal comes at a particularly delicate time for the company, as YG is planning an initial public offering of stock this autumn. G-Dragon’s drug use, regardless of how innocent he says it was, may be a “constraint” on Big Bang’s activities for the near future, according to the revised prospectus that YG submitted to the Korea Exchange Inc. Oct. 18.

Bloomberg reports that YG is now hoping to raise 35.9 billion won ($31 million), which is about 4 billion less than it had earlier sought when Big Bang was going full steam.

In contrast, YG’s main rival, S.M. Entertainment, saw its own share prices triple this year even as the benchmark Kospi Index declined by 9.5 percent.

In fact, according to experts, S.M.’s impressive showing is probably the main reason YG’s price did not fall as much as it might have given the breadth of the scandal. Its stock price was 64,000 won Oct. 18, down from 69,000 won Oct. 5.

Not taking any chances, YG plans to establish an artist risk management team to nip potential scandals in the bud, since, according to the prospectus, an artist’s image affects the revenue of its management company.

As it stands now, orders for the stock in the IPO will be taken in mid-November. Originally, the offering was scheduled for mid-October.