What's holding back innovation among Korean startups?

Korea's largest fashion shopping platform, Musinsa, finds itself embroiled in an investigation by the Seoul Regional Tax Office. The probe, initiated last month, centers around allegations that CEO Cho Man-ho misappropriated corporate funds for his real estate investment subsidiary, Lapel. This investigation, led by Investigation Bureau 4, stands apart from typical tax audits due to its jurisdiction over special inquiries that can commence without prior notice.

In severe instances, these investigations can morph into tax offense probes, potentially exposing the accused to criminal charges and substantial business risks.

Interestingly, this Bureau 4 inquiry unfolded concurrently with another investigation by the Fair Trade Commission (FTC) into Musinsa. The FTC's probe, which concluded earlier this month, examined whether Musinsa restricted certain partner brands from selling their products through alternative retail channels to secure exclusive sales rights. Despite the ongoing FTC investigation, Musinsa remains under scrutiny by Bureau 4 for the Cho Man-ho's alleged fund misappropriation.