SM to Hold General Meeting on 31st Next Month... Full-Scale Showdown with HYBE

[Asia Economy Reporter Byungseon Gong] SM has disclosed the agenda for its regular shareholders' meeting. A vote battle with HYBE over the appointment of inside directors is expected to be inevitable.

On the 22nd, SM announced the agenda for the regular shareholders' meeting and stated that the meeting will be held at 12:00 PM on March 31. The agenda will include approval of financial statements and profit distribution, partial amendments to the articles of incorporation, and the appointment of inside and outside directors.

SM's management proposed new inside director candidates. The candidates are Jang Cheol-hyuk, Chief Financial Officer (CFO); Kim Ji-won, Head of the Marketing Center; and Choi Jeong-min, Head of the Global Business Center. CFO Jang is known as an expert in accounting, taxation, and mergers and acquisitions (M&A). Kim and Choi joined SM in 2000 and 2003 respectively and have been working there since, making them well-versed in the company's internal affairs. HYBE has proposed Lee Jae-sang, HYBE America CEO; Jung Jin-soo, Chief Legal Officer; Lee Jin-hwa, Head of HYBE's Business Planning Office; and Park Byung-moo, Managing Partner of VIG Partners as inside director candidates.

The outside director candidates proposed by SM's management are Kim Gyu-sik, Chairman of the Korea Corporate Governance Forum; Kim Tae-hee, Attorney at Pyeongsan Law Firm; Moon Jeong-bin, Professor at Korea University Business School; Min Kyung-hwan, Partner at Blockore; Lee Seung-min, Partner Attorney at Peter & Kim; and Cho Sung-moon, CEO of Chartmetric, totaling six people. Other non-executive director candidates include Lee Chang-hwan, CEO of Align Partners, and Jang Yoon-jung, Vice President of Global Strategy at Kakao Entertainment.

Meanwhile, a verbal dispute over SM's management rights also took place outside the court. On the morning of the same day, a hearing was held at the Seoul Eastern District Court regarding a provisional injunction filed by former executive producer Lee Soo-man, requesting to block SM's capital increase and convertible bond issuance targeting Kakao. Lee's side stated, "The allocation of new shares to a third party to oust the largest shareholder or weaken control is illegal." On the other hand, SM argued, "The former executive producer has earned significant profits over a long period through an abnormal one-person producing system," and "He is driving the current situation into a management rights dispute with vague suspicions and speculative remarks."