By Kwak Yeon-soo

Graphic by Bae So-young

YG Entertainment's shares fell for the third consecutive day amid mounting allegations that Yang Hyun-suk has pressured a witness to change her testimony to cover up former iKON member B.I's alleged use of illegal drugs.
Yang said on Friday he will step down from all positions he serves at the agency, denying allegations of corrupt ties with the police.

"I sincerely apologize to everyone who has been involved in and offended by the recent controversy. I hope all the rumors and false reports will be cleared through a series of investigations," Yang said in a statement.

The share price of YG closed at 29,500 won ($24.90) on Friday, down 5.6 percent from the previous session. The stock price hit the bottom at 28,300 won per share on May 27 when the National Tax Service searched the company over tax evasion allegations following the Seungri fiasco that picked up in March.

On Thursday, the witness for B.I's drug scandal revealed her identity and claimed police dismissed the investigation into B.I's alleged drug use due to corrupt ties with YG.

B.I, 23, whose real name is Kim Han-bin, allegedly bought the hallucinogenic drug LSD in 2016 and police detected signs of the transaction, but did not investigate him.

After local media outlets reported on the case earlier this week, B.I apologized and announced he would leave his band iKON and YG.

However, the case is expected to get more complicated as the police said they will reopen their investigation into B.I. and look into the drug allegation.

Market analysts said YG is unlikely to recover its share price despite the positive outlook for the entertainment sector in general.

"Investors should take a cautious approach until there is momentum for a turnaround in share prices of YG," said Lee Ki-hoon, an analyst at Hana Financial Investment.