Lee Soo’s agent, Hwawoo Legal Firm, released a statement on February 7 outlining his position on suing SM Entertainment for violating corporate rules. SM Entertainment recently entered into a partnership agreement with Kakao Entertainment, and it was subsequently discovered that the two labels took unlawful steps to make Kakao SM’s second largest stakeholder, accounting for 9.05% of their shares.
This happened 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, 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 to SM Entertainment’s regular shareholder meetings, and since then there have been several disputes over the management rights invoked against Lee Soo-man, such as asking for access to the accounting and board of directors. minutes.”
Earlier it became known that there was a management disagreement between Soo-man and Align Partners (a shareholder activist fund). Under such circumstances, new equity and convertible bond issues are considered prohibited. This results in several downsides, drops in share value, and less control over the company for the current owners, making Soo’s perspective man reasonable given his position.
Netizens react to Lee Soo’s decision to sue SM Entertainment, the company he founded.
Hwawoo’s comment clearly explains the events leading up to Soo viewpoint. man’s It says,
“On January 20 of this year, SM Entertainment’s co-CEOs Lee Sung-soo and Tak Young-joon agreed to Align Partners’ proposal without consulting the company’s largest shareholder, Lee Soo-man.”
It goes on,
“It is clearly illegal for SM Entertainment’s board of directors, which is chaired by the co-CEOs, to issue new shares and convertible bonds to third parties during a period of internal conflict.”
SM unilaterally awarded Kakao new shares and convertible bonds for illegal reasons.
“(They joined Kakao) to expand their reach and make things more favorable to them, and they were trying to gain a competitive advantage by controlling the company’s direction.”
Lee Soo-man plans to sue SM Entertainment and take legal action against the company and its employees after discovering the company’s unlawful conduct.
“We will use a court order to prevent SM Entertainment’s board of directors from issuing additional stock and convertible bonds, and we will hold the directors civilly and criminally liable for doing so.”
Many people were shocked to discover that the company had turned against its own founder when the news broke. Although such practices were later proven to be typical in the business world, netizens praise Lee Soo-man for taking a courageous stance and willingness to address the issue publicly and legally.
Fans and netizens in general have overwhelmingly supported him as they understood the broader implications of the situation. Soo-approach men not only have to guarantee their own share distribution, but also the distribution of shares to other shareholders. This includes SM Entertainment musicians as well as revenue from their albums and comebacks. Fans are relieved to see that Lee Soo-man quickly resolved the issue by taking appropriate action, protecting many individuals within the company. They hope, of course, that the situation will be dealt with and that their partnership with Kakao will be annulled.
According to JTBC, Lee Soo-man stayed in the US and hurriedly returned to Korea on February 7. https://t.co/YkrGJW3SpF
— TMIKpop (@tmikpop) February 8, 2023
another comment on a post said
“I heard that the reason SM stocks are undervalued is because Lee soo-man took so much and took a lot of losses hahaha. Human greed itself” https://t.co/18hq9XQ056
— cow (@HlGHNOVA) February 7, 2023