The parent company host to Korean stars like Ladies' Code, Clara, and Iron was shut down by Korean authorities and being investigated for fraud, according to reports.

Ilkwang Group, a Korean company with numerous subsidiaries including Polaris Entertainment, was reportedly raided on March 11 by Korean government officials. The company, which had a variety of government contracts related to military matters, is being investigated for embezzlement and over-charging the military in multiple instances.

President Lee Gyu Tae, the president of both Ilkwang and its entertainment subsidiary, Polaris, has been arrested. Lee became known to K-pop fans for being involved in an alleged sexual harassment case with entertainer Clara.

The government confiscated internal documents and files from Ilkwang Group and its subsidiaries to build a case against ilkwang and Lee. Most of Ilkwang's businesses, including Polaris Entertainment, are also involved in the investigation.

"Lee is suspected of defrauding the government by playing a leading role in providing sub-standard parts for the equipment," said an investigator, reported the Korean Observer.

The company is suspected of embezzling over $50 million USD. Lee was previously arrested in a related arms-dealing case in 2009.

There are reports that Polaris Entertainment is currently closed. The alleged closure comes a week before solo artist Iron was set to formally debut.

Iron previously was featured on Show Me The Money 3 and topped Korean music charts in September 2014 with his song, "Poison." He also featured in songs of popular Korean artists.

Lee's home was also said to have been raided, and he is currently being investigated for financial crimes against the government.

The president was accused of sexual harassment by Clara, an actress-singer who filed a contract nullification lawsuit against Polaris Entertainment. Clara had released text conversations between herself and Lee in January.

Despite the raid and the reports of Polaris Entertainment's shut down, Polaris Entertainment's official Twitter account was still releasing information throughout the day on March 11. The latest Tweet was related to former American Idol  and K-Pop Star 3 contestant Han Hee Jun's appearance in the film "Seoul Searching."

However, the Polaris Entertainment website was down within 24 hours of the reported raid.

In 2014, Polaris Entertainment was struck by tragedy when two members of girl group Ladies' Code died in a car accident. The three surviving members returned to the company after several months of hiatus in order to prepare for a comeback.

The future of Polaris Entertainment, Iron, and Ladies' Code have yet to be clarified by Polaris or Ilkwang.

[ #한희준 ] '스크린 데뷔' 한희준, 美 'CAAM 페스티벌' 공식 초청 https://t.co/flvV8Z3PpE #CAAM페스티벌 #서울서칭 pic.twitter.com/IzFD5JE5T3

— Polaris Ent. (@Polaris_Music) March 11, 2015