SM Entertainment denied rumors that its artists bought sex and used drugs at an adult entertainment establishment in Japan.

“Currently, groundless rumors about Johnny and Haechan of NCT regarding prostitution, drugs and other disturbing content are being spread and reproduced indiscriminately online. These rumors are completely false and spreading these rumors are criminal acts that severely defame our artists,” wrote SM Entertainment on Kwangya 119, its website established for reports on artist defamation and fake news, on Tuesday.

It added that groundless and malicious rumors concerning NCT members and Kim Hee-chul of Super Junior are also circulating.

The agency warned of strong legal action against those doing so.

“We’ve gathered enough evidence regarding many posts related to this. We plan to make sure that the perpetrators of these acts are legally punished, with no settlements or leniency, regardless of their nationality,” said SM Entertainment.

Rumors started by a Japanese netizen that Kim Hee-chul visited an adult entertainment establishment in Japan with younger SM artists went viral on social media Tuesday.

Kim Hee-chul denied such rumors and reassured his fans on Bubble, a fan communication platform.

“I am addressing the issue briefly here because you might worry and be disappointed. I’ve never met with other younger SM artists outside the agency for a meal or to have a drink. I do not even have their phone numbers,” said Kim.

Meanwhile, SM shares dropped 8.18 percent from the previous session's close, closing at 81,900 won ($60.00) Tuesday after the rumors began to spread.