On Friday, executives from SM Entertainment denied a report in the publication Segye that the South Korean government had launched a tax evasion investigation into the K-pop record label.

According to the report, SM Entertainment hid millions of dollars from the government in oversees investments.

Yet in an official statement released hours after the report, SM Entertainment executives dismissed the allegations as being fictitious.

"The news reports from today about SM's involvement in tax evasion are far from the truth," the SM statement read, according to eNEWS.

"We are currently undergoing a periodic tax investigation following our last filing from 2009."

The label's statement also included a warning to the press.

"Please refrain from reporting on speculation based on rumors without any evidence."

Yet, 30 personnel from Korea's National Tax Service allegedly descended on SM Entertainment's Seoul headquarters on Thursday, without giving the standard 10-day notice.

"The National Tax Service did not give the notice until the day of as this was being treated as a special investigation and they wanted to make sure there was no time for the agency to tamper or destroy evidence," read a translation of the report provided by the site One Hallyu.

SM Entertainment is allegedly accused for setting up paper companies in foreign companies in the name of their artists and then failing to report their income on tax filings.

According to 'Segye's report, the record label is said to have set up various paper companies in Hong Kong and such under the name of famous artists, and hid the earnings from overseas concerts in the paper companies instead of reporting them on their tax documents.

The artists on the SM Entertainment roster include Girls' Generation, EXO, Super Junior, SHINee and TVXQ.