HYBE and SM Entertainment released statements to refute the current situation of the two companies one after another.
SM CEO Lee Sung Soo’s first video On February 16th, HYBE released a statement containing the following key points:
1. Former Chief Producer Lee Soo Man can work overseas for personal production duties unrelated to SM Entertainment and does not mean returning to SM Entertainment after 3 years.
2. We have not heard of CT Planning Limited, where former chief producer Lee Soo Man was allegedly involved, and his relationship with SM Entertainment will be terminated through a Stock Purchase Agreement (SPA).
3. If Lee Soo Man’s personal activities are unrelated to SM Entertainment and we cannot obtain detailed information on the ESG activities promoted by Lee Soo Man, we will not get involved.
In response, SM Entertainment released the following statement on February 17.
CTP (CT Planning Limited), the overseas version of Like Planning, signed a contract directly with an overseas label instead of SM in order to hide its true intentions, and the problem cannot be solved by HYBE canceling the contract. Business relationship with SM. In the video uploaded by Lee Sung Soo, it was mentioned that the content of the problem was not the contract between CTP and SM, but the direct contract between former chief producer Lee Soo Man and a foreign label.
HYBE’s stance thus distorts CTP’s fundamental problem of offshore tax evasion allegations.
The fact that HYBE knew about CTP, which is an overseas version of the project, and entered into a stock purchase agreement, [HYBE] If you participate in the tax evasion suspicion of former chief producer Lee Soo Man or turn a blind eye, [HYBE] The fact that he signed the contract without knowing the problem means that he admitted that he was deceived by former chief producer Lee Soo Man. Therefore, this is an indication that HYBE’s management has questioned various shareholders and related institutions as to why his M&A, worth more than 1 trillion won (approximately $768.4 million), was carried out without ever exercising due diligence. Means you need to explain.
In addition, in an official statement released when HYBE announced that it had signed a SPA contract with former chief producer Lee Soo-man, “Chairman Bang Si-hyuk will continue to support the humanity and sustainability campaign that Lee Soo-man announced earlier. Chairman Bang Si-hyuk said that HYBE fully agreed with strategic directions such as implementing Metaverse, establishing multi-platform, etc.-label system, and campaigning to save the planet. It is hard to believe that Chairman Bang Si-hyuk himself has not been informed of the details of the campaign, which he claimed to have “deeply agreed with.”
HYBE then responded again later that day on February 17 with this statement.
Hello, this is HYBE.
We would like to clarify HYBE’s position in response to SM Entertainment’s (hereafter referred to as SM) statement today.
Regarding the suspicion of CT planning that SM Entertainment CEO Lee Sung Soo mentioned, the press release distributed on February 16 stated as follows.
When completing the SPA with Lee Soo Man, I was not informed of CTP’s ownership of the company or Lee Soo Man’s ownership of the contract between CTP and SM. In addition, in the case of a business relationship that the company is not aware of, the contract included the resolution of the business relationship that Lee Soo Man found.
If CTP and SM do not have a direct contract, as SM counterargued, it is even more natural that we are not aware of it. However, due to the contract with Lee Soo Man, it has been agreed that even if it is not a direct contract with SM, SM artists who have already signed a contract with CTP will not receive any benefits. In addition, the issues raised by SM are pointless because we will manage contracts transparently through the board of directors so that there will be no problems in the future. There is no reason to distort anything, and no reason to question our efforts.
However, if SM decides that the contract with CTP cannot be resolved through the SPA with Lee Soo Man, I would like to hear SM’s position other than disclosing this contract.
In particular, since this type of contract is not well known outside of the entertainment agency, the management of the agency should manage these contracts transparently and fairly for the company and the artists. There must be a member of the board of directors who approved this agreement when it was completed, and it is hoped that whatever board member has approved it, the current board members have taken appropriate action with respect to this agreement. I’m here.
All of the issues that SM has exposed and raised allegations reveal SM’s corporate governance issues, and unfortunately, these issues all originated within SM. In fact, we have solved SM’s structural problems one by one with a positive perspective, and we will continue to work hard to solve them.
However, SM must demonstrate efforts to solve real internal problems for these changes to produce results. I don’t think it’s the right way to question the largest shareholder for solving SM’s problems.
SM directors are SM fans, employees, artists, and shareholders.
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