Lee Soo-man files criminal lawsuit against new CEOs for suspicious "power grab" through Kakao

Article: SM joins hands with Kakao, but Lee Soo-man in strong protests.. "filing a criminal suit"

Source: E Daily

Lee Soo-man is strongly protesting and expressing suspicion over Kakao's investment in SM.

On the 7th, SM Entertainment announced that "Kakao has secured a 9.05% stake in SM and will become the second largest shareholder in the company through the investment."

The two companies, Kakao & Kakao Entertainment and SM signed a three-party business agreement to take the lead in raising the global status of K-Culture by utilizing each other's business capabilities in a rapidly changing music and content environment. They aim to maximize synergy by co-planning K-pop artists through global auditions and promoting global management business together overseas.

Previously, SM co-CEOs Lee Seong-soo and Tak Young-joon announced Lee Soo-man's resignation, and Kakao secured a stake in SM, so the influence of Lee Soo-man , the largest shareholder, appears to be losing power. The two CEOs stated that "they would break away from Lee Soo-man's exclusive production system and introduce a multi-production system where 5 production centers, internal, and external labels independently produce music under the 'SM 3.0' vision."

However, on same day, Kakao also became the second largest shareholder at SM raising suspicion.

Lee Soo-man revealed through his lawyer at Hwa-woo law firm, "At the time of the dispute over management rights, the SM Board led by the co-CEOs gave new shares and convertible bonds to a third party. This issuance is clearly an illegal act that violates commercial law and the articles of incorporation."

He further stated, "The SM Board unilaterally did this to expand their stake in favor of the current management and secure an edge in the competition for control. We plan to block their illegal attempts through provisional injunctions to ban the issuance of convertible bonds."

He added, "We plan to assert all legal responsibilities. We're filing both a civil and criminal complaint against the directors who voted in favor of this illegal resolution."

1. [+200, -59] Kakao's tentacle-level expansion is seriously crazy... are we sure there aren't illegal things going on?? Why is the government only interfering when it's Samsung but Kakao is allowed to roam free?
2. [+185, -48] Kakao is getting their tentacles into everything and looking to eat up SM for free. Probably why Lee Soo-man got kicked as producer.. I hope he wins his lawsuit.
3. [+151, -16] He's been stealing half of SM's profits through his private company but he's acting like some type of saint. I bet he's used up all his personal connections to amass his wealth everywhere too.. disgusting!
4. [+74, -2] Up until now, he's been siphoning of all of SM's profits through his private company Like Planning. That's why the company hasn't been able to pay dividends to shareholders because he has funneled over 200 billion won. Only shareholder-friendly agencies deserve to survive the industry!!
5. [+66, -5] It was quite suspicious when Kakao suddenly rushed in after Align, shareholders, and others started raising alarm over leaking profits.. looks like they were behind them all alongㅋ.. 
6. [+68, -6] Eh.. not sure why he's acting proud like this? Does he not realize he's at risk for a criminal suit himself for breaching his fiduciary duty?
7. [+38, -4] I don't know about everything else but I hate Lee Soo-man because he contributed to the development of Chinese idol trainees in our country. 
8. [+25, -3] At this level, the person deserving of the congrats is his nephew ㅋㅋㅋㅋ
9. [+22, -4] Hyun jin-young, H.O.T, SES, Shinhwa, BoA, Fly to the Sky, TVXQ, Soshi, EXO..  teens and kids in their 20s don't realize just how big SM used be back then. This is a company Lee Soo-man built with his own hands through hard work and sweat.. i'd be upset too if my own company treated me this way. I support you.. I hope he's able to resolve it well. 
10. [+14, -0] Kakao needs to be stopped!
11. [+8, -1] Anyone else suspicious as to why Lee Soo-man has yet to be arrested for breach of duty and embezzlements??
12. [+10, -2] JYP turned out to be the only normal one in the end...daebak 

Additional source(s): Economist, Korea Economy TV