YG Entertainment Inc. is readying to return 67 billion won ($56.9 million) to Louis Vuitton Moet Hennessy (LVMH) as it expects the fund under global luxury fashion name to cash out from the Korean entertainment company engulfed with ever-ballooning scandals on drug, sex and bribery involving from the founder to its artists.

According to sources from the investment banking (IB) industry on Thursday, holdings by LVMH’s investment unit World Music Investment in 1,359,688 redeemable convertible preference shares (RCPS) of YG expire on October 16. They are redeemable at 44,900 won apiece in cash plus 2 percent annum interest or common shares.

RCPS are hybrid securities that can be redeemed for cash or exchanged for common stocks. As Great World Music Investment opts to cash out from the shares bought at 61.05 billion won in October 2014 amid plunge in the stock price.

Share prices of YG Entertainment has been nosediving since January when Seungri, a former member of longtime Korean favorite boy band Big Bang, was accused of a number of charges including drug abuse, brokering prostitution and embezzlement. The price plummeted by more than 41 percent from its peak at 50,800 won on January 7 to 29,850 won on Thursday. The ongoing scandal led its CEO Yang Hyun-suk to step down from the post due to the allegation that he arranged prostitutes to bribe investors.

On Friday, shares of YG Entertainment fell 4.52 percent to close at 28,500 won.

By Jin Young-tae and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]