As HYBE took over SM Entertainment (SM)’s shares, the management right dispute surrounding SM turned into a mud fight.
Earlier, HYBE announced on Feb 10th that they had signed a contract to acquire a 14.8% stake held by Lee Soo Man, SM’s major shareholder and former executive producer, for 422.8 billion won.
CEO Lee Sung Soo claimed, “Lee Soo Man established a company called ‘CT Planning Limited’ in Hong Kong in 2019 with a capital of 1 million US dollars. This is a 100% private company owned by Lee Soo Man, and is an ‘overseas version like planning’. Wasn’t this to avoid the surveillance of the National Tax Service by Lee Soo Man? Even after production ends, SM will pay Lee Soo Man 6% of previously released album-related sales for 70 years and 3% of management sales for 3 years from 2023.”
He continued, “The release of aespa’s new album was scheduled for around Feb 20th, 2023. The real reason why the comeback was delayed was Lee Soo Man’s lyrics about planting trees.”
Lee Sung Soo suspected that the “tree planting” movement, which Lee Soo Man emphasized as the beginning for a sustainable future, actually aimed at developing overseas real estate.
On the same day, HYBE drew a line, “We have not received any information about CT Planning Limited. We already confirmed that there are no business connections between SM and former executive producer Lee in our stock purchase contract, and producer Lee has not received any royalties since he signed the contract. If the contract (with CT Planning Limited) exists, we would resolve it completely. There is no reason for us to get involved in any type of activities or campaigns related to former executive producer Lee unless they are directly linked to SM. We have never received any details about the ESG-related campaign.”
In response, SM said on Feb 17th, “If HYBE signed the share purchase agreement despite being aware of CTP, they sympathized with or condoned Lee Soo Man’s suspicion of offshore tax evasion. If they signed the share purchase agreement without knowing this, they admitted that they were deceived by Lee Soo Man.”