Lee Soo Man Shares Letter Explaining His Decision To Work With HYBE Following Court’s Decision To Ban SM From Issuing New Shares
SM Entertainment’s founder Lee Soo Man has shared his perspective in a detailed letter following the court’s decision to grant a petition for his injunction.
In February, HYBE confirmed their acquisition of a 14.8 percent stake of SM Entertainment from Lee Soo Man for 422.8 billion won (approximately $334.3 million). Before HYBE’s acquisition, Lee Soo Man was SM Entertainment’s top shareholder with an 18.46 percent stake, with Kakao recently becoming the second-largest shareholder after acquiring a 9.05 percent stake.
However, Lee Soo Man denounced this move as illegal and declared that he would be taking legal action against SM Entertainment for violating the Commercial Act by illegally issuing new shares of the company and convertible bonds without the agreement of the top shareholder (Lee Soo Man).
On March 3, the 21st Civil Division of the Seoul Eastern District Court decided to grant a petition for the injunction filed by Lee Soo Man, which bans SM Entertainment from issuing the new shares and convertible bonds worth 217 billion won (approximately $166.6 million) they were preparing to issue.
Following this decision, Lee Soo Man shared a letter that looks back on his work with SM Entertainment (hereafter SM) and details his decision to work with HYBE.
Read his statement below:
To my SM family whom I love, and the many people who love SM,
Ever since becoming a bushy-haired ballad singer in the 1970s, I have lived my entire life with the public. I received more than enough love as a singer and as an MC, and the singers I produced after becoming a producer have also received lots of love from the public. That’s why my apologetic heart about the recent happenings regarding SM is even greater.
When I was planning SM in 1989, I was young and a start-up. Because I enjoyed music, I thought about what system singers needed. I researched a western model of the music industry and established SM’s corporate structure. Korean-style pop and the world of idols were achieved from the combination of developed business models and Korean-style talent development models. The achievements of K-pop made around the world by SM, alongside JYP, YG, HYBE, and more, is a miracle and blessing to Korea.
Meanwhile, from the time of Hyun Jin Young to H.O.T., BoA, TVXQ, Super Junior, Girls’ Generation, SHINee, EXO, Red Velvet, NCT, and aespa, my youth has also gone by.
SM’s “post-Lee Soo Man” [period] was my long-term concern. Entertainment is a world of creativity. As I am not passing SM down to my children or relatives, I believe I have to give it up to the industry’s “best” who can make it more prosperous. I’ve said that if there’s a governance issue within SM, it has to be improved, and if we need a professional manager, they should be in charge no matter the cost.
To me, “best” is producing. Producing is a 24/7 world of passion and creativity where you must endure endless failures until the birth of a star. Behind a star’s performance, that runs into fans’ hearts and creates their cheers, tears, emotions, and hope, is a world of producers who discovered and raised that star. If there is no public, there is no star, and if there is no star, there is no producer, and if there is no producer, the music industry cannot succeed. This is also true in reverse.
The past two years have been a time to find the “best” that most suits SM. On the other hand, I’ve urged current management to prepare for an SM era without Lee Soo Man. This is because I have already decided to step down from the SM stage. In addition to HYBE and Kakao, funds, large corporations, overseas global companies, and more wanted SM and sought me out.
To me, “the best” was HYBE. Although they were SM’s competitors, the success of BTS is a source of pride for the whole country. As a music producer like me, HYBE’s chairman Bang Si Hyuk is someone who’s experienced a time of struggle. He’s someone who’s experienced eating snacks as meals with aspiring singers, being buried in the practice room, and wandering in all directions in search of investors. Just like me, he lived for music and created the record-breaking BTS. I felt that he treated his artists with the same affection as me. This was the reason for my decision, which many people were curious about.
As I wrap up the first part of my life as SM’s champion, I am now moving on to part two. My “next” is a place where technology meets culture. I am walking with heavy footsteps towards that place.
This is to not only SM’s family, but to its current management.
I do not regret the time I spent with everyone.
To me, SM was a challenge, my happiness, and a blessing.
I also want to share this with the artists I was with.
After meeting you, who were all full of dreams, we created music while laughing and crying together in those bittersweet times. You, who poured all your energy, from your fingertips to your feet, into stage-focused performances, were actually my teachers. I respect you, I am proud, and I thank you.
SM Entertainment is currently planning the implementation of SM 3.0, while HYBE recently announced a new “SM with HYBE” campaign to share the agency’s business strategy and plans to prioritize shareholders of SM.