"This is the first time experiencing such a general meeting..." SM General Meeting Faces Difficulties

[Asia Economy Reporter Minji Lee] SM Entertainment's regular shareholders' meeting is facing difficulties. The verification process is taking a long time due to a large concentration of voting rights on the shareholder proposal side, Align Partners (hereafter Align).

The 27th regular shareholders' meeting of SM, scheduled to be held at 9 a.m. on the 31st in the conference room on the 2nd floor of Acro Seoul Forest D-Tower, Seongdong-gu, Seoul, has not even started the opening ceremony for two hours. SM stated, "Since this is the first shareholders' meeting held with much interest, we gathered from 7 a.m. to verify proxy forms, but it took a lot of time to compile them," adding, "Verification is currently underway in the presence of the proposing shareholders and inspectors."

About 80 small shareholders filled the meeting room that day. The meeting was delayed by about an hour and a half to verify the authenticity of the large number of proxy voting rights submitted by Align, the shareholder proposal side. Before the meeting started, a small shareholder who spoke during the open remarks identified themselves as a long-time SM shareholder and said, "I am attending this meeting to support Align's shareholder proposal," adding, "The largest shareholder, who holds less than 20% of the shares, is shaking up management without paying dividends to shareholders and taking shareholders' money. Awareness is needed," raising their voice.

The meeting will feature a vote between SM and Align. The main issue is the appointment of auditors. Looking at the simple shareholding ratio, the management-friendly shares are higher than Align's. SM, including the largest shareholder Lee Soo-man (18.50%) and SM's registered executives, holds 18.88% of shares, while the National Pension Service and KB Asset Management hold 6.16% and 5.13%, respectively, and the remaining 60.23% are small shareholders. Align Partners (0.21%) holds more than 0.91% combined with Samsung Securities (0.62%), the fund trustee, its affiliate CHL Investment (0.04%), and registered executives (0.70%).

However, since the voting rights of the largest shareholder are limited to 3% for the appointment of auditors and audit committee members, the key issue is expected to be how much friendly shares each side has secured.