South Korea's tax office said Thursday it has launched an investigation into the country's largest entertainment agency amid rumors of offshore tax evasion by the company that manages some of the top K-pop celebrities.

The National Tax Service (NTS) recently sent dozens of auditors to the headquarters of SM Entertainment located in Gangnam, southern Seoul, to secure accounting books and other financial records, according to the NTS and company officials.

SM Entertainment is the country's leading management agency that represents top K-pop stars, such as Girls' Generation, Super Junior and TVXQ, who have led the Korean culture wave in Asia and other countries.

Industry watchers suspect that the company may have evaded taxes by not reporting fully the money these celebrities earned broad.

An SM Entertainment spokesperson dismissed the allegation as "groundless," claiming that what is under way is a routine tax audit following one in 2009. The NTS declined to comment, saying that it cannot talk about an ongoing probe into a specific company. (Yonhap)