SM Entertainment CEO Lee Sung Soo released a statement alleging Lee Soo Man’s corruption.
On February 16th, CEO Lee Sung Soo made a statement through his YouTube channel, revealing his position on 14 items, including former executive producer Lee Soo Man’s overseas planning, unreasonable instructions, and real estate business, and caused a stir.
CEO Lee Sung Soo argued that CT Planning Limited (CTP), which was established in Hong Kong by Lee Soo Man in 2019, is a 100% private company owned by him, and is an overseas version of Like Planning. He said, “It’s the same as the existing production, but only the structure of the contract has changed abnormally through overseas label companies.” He said. “Lee Soo Man ordered each label to sign a separate contract for profit settlement, and was getting 6% before settlement between SM and label companies.”
“The contract between SM and Like Planning was not properly recognized by the National Tax Service of the Republic of Korea in 2014 or 2021. As a result, SM had to pay billions and tens of billions of dollars in taxes, as reported in the media,” he expressed his opinion, “I wonder if it is a typical offshore tax evasion that allows profits to be attributed to Hong Kong’s CTP through a transaction structure that does not fit the substance.”
In addition, CEO Lee said that Lee Soo Man ordered baffling demands including:
- to make statements to the media that artists need Lee Soo Man to instigate executives and employees to sign a direct contract with an overseas subsidiary owned by him, or CTP, and to lower sales in the first quarter.
- Utilize employees to emphasize the necessity of Lee Soo Man.
- Temporarily establish a consulting contract between Lee Soo Man and SM in Korea to justify Lee Soo Man’s activities.
- Require all albums and artists promoted abroad to sign a contract with Lee Soo Man’s overseas cooperation CTP, or have SM sign a second producing contract with Lee Soo Man in Korea.
- Create a response team for Lee Soo Man, even if it costs up to 10 billion won (approximately $7.8 million).
- Find a way to make the company dependent on Lee Soo Man and lower first-quarter profits.
- Consider postponing mid-to-late February and March releases until April after releasing completed music in December.
In addition, CEO Lee also argued that Lee Soo Man’s insistence on tree planting and sustainability pushed back the singers’ comeback. “At some point, Lee Soo Man suddenly emphasized tree planting and insisted on opening K-POP festivals linked to tree planting in each country,” he said. “There is Lee Soo Man’s desire for real estate business rights behind the message of tree planting, sustainability, or ESG, and cultural exchanges.”
“The release of aespa’s new album was scheduled for around February 20, 2023. However, Lee Soo Man ordered to sing a song with lyrics that projected this tree planting that did not suit aespa at all, and due to the wrong direction, content that no one could sympathize with came out, so our co-CEO decided to cancel it,” he added.
He also notably claimed that Lee Soo Man has been envisioning the construction of a ‘SMart Music City‘ featuring music festivals, open auditions, creative collaboration and more to fuel his own greed. He also alleges Lee Soo Man planned on installing casinos at his ‘Music Cities’, and was an advocate of “legalizing marijuana”, which would “allow people to enjoy music and entertainment even more”.
Lastly, CEO Lee said, “Now, we at SM Entertainment will start all over again. That is SM 3.0. Now listen to our SM music again.”
Meanwhile, HYBE recently signed a contract to acquire a 14.8% stake held by Lee Soo Man, the founder of SM Entertainment, for 422.8 billion won.
Source:(A)
