South Korean actor Jang Geun-suk and singer Rain dismissed earlier reports on their alleged tax evasion as “groundless” on Monday. 

Controversy swirled over the popular stars after a news outlet reported that 10 celebrities including Jang and Rain are under investigation for evading taxes. The two are reportedly suspected of having created false-name accounts abroad to avoid paying taxes at home. 

Jang’s label, TreeJ Entertainment, however, flatly denied the reports. The agency stated that Jang is not being investigated by prosecutors and all the concert tours and fan meetings in China were arranged under a legal contract. 

Rain’s agency, Cube DC also refuted the reports by saying that Rain received full payment for his activities in China through the company’s official bank account. The singer reported all his sources of income to the national tax agency in a proper manner, it added. 

Later the day, however, the state news agency Yonhap reported that prosecutors had launched a probe into a company managing the embattled Korean stars’ activities in China on suspicion of tax evasion. The prosecution has already raided the company’s office in Seoul to obtain related documents and an investigation is underway, according to the reports.

By Ock Hyun-ju (laeticia.ock@heraldcorp.com)