Kim Minjong Criticizes "Handled Like a Midnight Escape"
Employees Warn "Must Stay Sharp" Backlash
Entertainment agency SM Entertainment is experiencing internal conflict over the resignation of its founder and major shareholder, Lee Soo-man.
According to industry sources on the 6th, singer and actor Kim Min-jong sent an email to all SM employees the previous day, criticizing the company's announcement of the 'SM 3.0' vision, which marks the end of Lee Soo-man's producing role.
SM co-CEOs Lee Sung-soo and Tak Young-joon announced on the 3rd that they would introduce a 'multi-producing' system, moving away from the exclusive producing system led by founder and chief producer Lee Soo-man, to a structure where five production centers and internal and external labels independently create music. While Kim Min-jong, who has been with SM for 17 years, publicly criticized this, voices supporting the reorganization are growing among employees.
Lee Sung-soo, the CEO and Lee Soo-man’s nephew-in-law, declared the resignation during the reorganization announcement on the 3rd, saying, "Although the contract with SM and the chief producer role has ended, we sincerely thank Mr. Lee Soo-man, who continues to support SM as a shareholder." Kim Min-jong strongly criticized them for announcing the restructuring without consulting Lee Soo-man.
Kim Min-jong claimed, "Co-CEOs Lee Sung-soo and Tak Young-joon, who say they are doing this for Mr. Lee Soo-man and the SM family, have cut off all communication with him and unilaterally announced the restructuring and farewell without any internal consultation, contrary to their public statements."
Previously, controversy arose when it was revealed that major shareholder Lee Soo-man had taken over 20 billion KRW through his personal company Like Planning under the pretext of producing. In response, SM terminated its contract with Like Planning early in October last year. Since then, Align Partners Asset Management (hereafter Align) has been demanding a restructuring of SM’s system.
Last month, SM formed a board of directors with a majority of outside directors, established an internal transaction committee, and promised to return at least 20% of separate net profits to shareholders over the next three years.
Kim Min-jong raised his voice, saying, "Why suddenly present a salary increase plan to all employees except Mr. Lee Soo-man’s secretariat at a time far earlier than the regular salary negotiation period? What is so urgent and fearful that the board meeting to agree with Align was hastily held on the morning of Lunar New Year's Day, when everyone was paying respects and performing the traditional bow?"
He added, "I believe none of this benefits the long-term interests of the SM family or SM shareholders. As an actor and singer, I believe Mr. Lee Soo-man’s producing and artistic sensibility are essential for the activities of SM artists, including myself."
Kim Min-jong also defended producer Lee Soo-man, saying, "I am aware of various opinions such as 'he is old' and 'K-pop trends have changed.' We can fill in the gaps together." He then accused the two CEOs’ actions as "betrayal and conspiracy worse than what you see in dramas."
Since the announcement, major shareholder Lee Soo-man has not come to the office. It is reported that one of the options being considered is to express his opinions as a major shareholder at the shareholders' meeting scheduled for March.
Inside SM, there is generally support for Lee Soo-man’s resignation and the proposed producing system reorganization.
Subsequently, on the SM board of the anonymous corporate community 'Blind,' employees posted comments supporting the reorganization, such as "We have become the third-ranked company with a market cap and operating profit less than half of HYBE’s. Songs, concepts, marketing?all have been below expectations. No mere structural improvement can catch up," and "We should not be intoxicated by past glories and must stay alert."
There were also responses opposing Kim Min-jong’s statements, such as "He seems completely unaware of what employees endure and tolerate every day," and "Mr. Lee Soo-man, please leave gracefully while people applaud," which have caused a backlash against Kim’s remarks.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
