Lee Soo-legal man’s agent, Hwawoo Legal Firm, issued a statement on February 7 outlining his position on suing SM Entertainment for violating business rules. SM Entertainment recently entered into a collaboration agreement with Kakao Entertainment, and it was subsequently found that the two labels took unlawful steps to make Kakao the second biggest stakeholder of SM, accounting for 9.05% of their shares.
This was done without the knowledge of Lee Soo-man, the agency’s founder and main shareholder. The co-CEOs, Lee Sung-soo and Tak Young-joon, accepted the deal from Align Partners, who was SM’s second-largest investor after Lee Soo-man. According to Hwawoo,
“Align Partners made a series of proposals last year to appoint an auditor for SM Entertainment’s regular shareholder meetings, and since then, there have been various disputes over the management rights asserted against Lee Soo-man, such as requesting access to accounting books and board meeting notes.”
It was previously disclosed that there was a managerial disagreement between Soo-man and Align Partners (a shareholder activist fund). Under such conditions, new stock and convertible bond issues are deemed prohibited. This results in various drawbacks, declines in share value, and less control of the firm for current owners, making Soo-perspective man’s reasonable given his position.
Netizens respond to Lee Soo-decision man’s to sue SM Entertainment, the firm he created.
Hwawoo’s comment clearly explains the events that led to Soo-viewpoint. man’s It says,
“On January 20, this year, SM Entertainment’s co-CEOs Lee Sung-soo and Tak Young-joon agreed to Align Partners’ proposal without consulting the company’s biggest shareholder, Lee Soo-man.”
It goes on,
“It is plainly unlawful for SM Entertainment’s board of directors, which is chaired by the co-CEOs, to issue fresh shares and convertible bonds to third parties at a period of internal conflict.”
SM unilaterally awarded fresh shares and convertible bonds to Kakao for what seemed to be unlawful reasons.
“(They joined with Kakao) to broaden their reach and make things more favorable to them, and they sought to gain a competitive advantage in controlling the company’s direction.”
Lee Soo-man plans to sue SM Entertainment and pursue legal action against the corporation and its workers after discovering the company’s unlawful conduct.
“We will use an injunction to prevent SM Entertainment’s board of directors from issuing additional shares and convertible bonds, and we will hold the directors civilly and criminally accountable for this.”
Many people were shocked to find that the corporation had turned against its own founder when the news broke. Though it was subsequently proven that such practices are typical in the corporate world, netizens commend Lee Soo-man for adopting a courageous stand and being prepared to address the matter publicly and legally.
Fans and netizens in general have overwhelmingly backed him as they grasped the broader implications of the situation. Soo-approach men are to safeguard not just their own share distribution, but also the distribution of shares to other shareholders. This covers SM Entertainment musicians as well as the revenues from their albums and comebacks. Fans are relieved to see that Lee Soo-man was swift to fix the problem by taking appropriate action against it, which safeguards many individuals under the firm. Naturally, they hope that the situation is handled and that their collaboration with Kakao is rendered null and void.
Per JTBC, Lee Soo-man has been staying in the US and hurriedly returned to Korea on the 7 Feb https://t.co/YkrGJW3SpF
— TMIKpop (@tmikpop) February 8, 2023
another comment on a post said
“I heard that the reason SM stocks have been undervalued is because Lee soo-man took so much and made a lot of losses hahaha. The human greed itself” https://t.co/18hq9XQ056
— cow 🧌 (@HlGHNOVA) February 7, 2023
