A member of one of South Korea’s biggest boy groups is facing charges that he procured sex workers for foreign investors at several nightclubs in Seoul’s upmarket Gangnam district, The Guardian reports.

Seungri, real name is Lee Seung-hyun, is the youngest member of Big Bang, the K-pop group who count rap star G-Dragon among their members. The 28-year-old denies the allegations, but says he has retired from entertainment as the scandal has gotten too big for both his band and his record label, YG Entertainment.

“It would be better for me to retire from the entertainment scene at this point,” Seungri wrote on Instagram. “As this scandal is too big, I have decided to retire. As for the ongoing investigation, I will take it seriously to clear myself of all the allegations. I give my heartfelt, sincere thanks to fans at home and abroad who gave their love for the past 10 years, and I think this should be it for the sake of the reputation of YG and Big Bang.”

Prostitution is illegal in South Korea, and the charges against Seungri carry a prison sentence of up to three years. Police are also said to be investigating claims that the Burning Sun nightclub, where Seungri was a public relations director, was involved in illegal drug use, sexual assaults, and police corruption, according to the South Korean news agency Yonhap.

Shares in YG reportedly slid by almost 16 per cent, and other K-pop companies have suffered losses, as a consequence of the scandal.

Big Bang have sold more than 140m records since 2006, but are taking a break as three members carry out compulsory national military service. Seungri himself was due to start military service on March 25 this month, and military officials say the singer will have to submit a written request if he wishes to defer in light of the allegations. Seungri has cancelled the remaining dates of his solo tour, which would have been a farewell before he begins service.

Check out Seungri’s Instagram post denying the accusations below.