SM Entertainment faces a major crisis as the company's founder and major shareholder, Lee Soo-man, has been revealed to be involved in illegal business practices. The news came as a shock to fans, artists, and shareholders, as Lee has long been seen as the driving force behind the success of SM's K-pop empire.
According to a recent statement by SM's CEO, Kim Young-min, Lee has been using a separate overseas corporation called CTP to preempt production royalties abroad. This company is not a new venture, but rather a longstanding business that has been making deals with overseas label companies for years. Lee's involvement with CTP has raised questions about the legality of these transactions, and whether they are in violation of Korean law.
The issue has been further complicated by Lee's position as a major shareholder in SM Entertainment. His involvement in CTP and other questionable business practices has raised concerns about the company's corporate governance and transparency. It has also put the company at risk of reputational damage, as investors and fans alike are now questioning the integrity of SM Entertainment.
The revelation has also led to internal turmoil at SM, as Lee's influence over the company has been a longstanding source of tension between him and other members of the board. In fact, Kim Young-min revealed that he had been receiving instructions from Lee to make statements to the media emphasizing the importance of Lee's role in the company, and inciting the need for his continued involvement.
These instructions have been met with resistance from Kim and other members of the board, who are concerned about the impact of Lee's involvement on the company's reputation and the well-being of its artists and employees. In an effort to address these concerns, the board has recently made a decision to break off its relationship with Lee and run the company through an independent board of directors.
While this decision has been met with some skepticism, it is seen as a necessary step in improving SM's corporate governance and protecting the interests of all shareholders. The move to an independent board of directors is expected to increase transparency, accountability, and fairness in the company's operations, and to help restore the trust of investors and fans in SM Entertainment.
Despite the challenges that lie ahead, Kim and the rest of the board remain committed to protecting the value and vision of SM Entertainment, and to ensuring the success of the company and its artists for years to come. As the company moves forward with a renewed focus on corporate governance and transparency, it is hoped that it will emerge from this crisis stronger and more resilient than ever before.
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