Article: Lee Soo-man, "legally smoke marijuana"..."drug business empire" and aespa "planting trees?"
Source: MBC
SM co-CEO Lee Sung-soo is confronting Lee Soo-man head to head with shocking allegations.
On the 16th, Lee Sung-soo (Chris Lee) made his first statement through a video message on his YouTube channel and stated, "Some media say Lee Soo-man is the largest shareholder and founder. I realize what they're trying to say. But SM employees no longer want to see the company used for Lee Soo-man's private interests and support the current management's plans to push ahead. Starting with this first statement, we plan to announce all 14 contents through several additional announcements in the future. The order is random."
"The contents being released today are 'overseas Like Planning CTP plans,' 'End of production contract = the first step in normalizing SM for all shareholders,' and "It's ok, we have tree planting."
"First off with Like Planning CTP, Lee Soo-man established a company called CT Planning Limited in Hong Kong in 2019 with capital of 1 million US dollars. The CTP is 100% Lee Soo-man's private company and said to be another 'Like Planning' for overseas."
"Since 2019, SM has signed contracts with China's Aesaemong, America's Capitol Records, and Warner Records, respectively, for global distributions of albums/music for WayV, SuperM, and aespa. But what's unusual here is that the existing production and work are the same but only the structure of the contract has been abnormally changed through overseas label companies like CTP Like Planning. WayV, SuperM, and aespa all produce all contents and music at SM. Naturally, SM and affiliates need to settle profits first, then Like Planning or Lee Soo-man are paid 6% for amounts settled to SM. But Lee Soo-man ordered each label to sign a separate contract and preemptively demanded his 6% settlement before SM and affiliates got their share."
"The contract between SM and Like Planning was not accepted by the National Tax Service in 2014 or 2021. Both me and the company think Lee Soo-man set up the contract that way to evade surveillance by the National Tax Service because he'd have to pay huge amounts of taxes. The CTP company isn't like Like Planning, but a separate overseas corporation. According to Lee Soo-man's stock purchase agreement with HYBE his domestic production is limited to 3 years but there are no restrictions on his overseas production at all. We're questioning whether HYBE knowingly signed that contract with Lee Soo-man well aware it included illegal elements or did they question the illegality in CTP structure?"
"On the second item on the 'End of Production Contract = First Step to Normalize SM for all shareholders, around December 2022, when Lee Soo-man's production contract ended, he told us not to announce anything about future production plans. The management and production departments had been thinking about and preparing for a re-organization based on a multi-production center once his contract terminated but his contract terminations didn't become a new start."
The instructions given by Lee Soo-man himself or through his aides are as follows:
▲Make a statement to the press that: The artists needs Lee Soo-man. ▲Incite staff that Lee Soo-man is needed ▲Sign a temporary advisory contract with Lee Soo-man and SM in Korea to provide legitimacy to Lee Soo-man's activities. ▲ In the future, for all albums and artist activities produced, sign a direct contract with Lee Soo-man's overseas corporation (CTP). ▲ Or if not, sign a second production contract with Lee Soo-man in Korea.
▲Create a general meeting response team for Lee Soo-man even if you have to spend 10 billion won. ▲ For affiliates that can't turn a profit, try to lower their first quarter sales even further so that they don't hit targets. ▲ For album/songs completed in December to be released in mid-February to March 2023, consider delaying the release date to after April."
"The shareholder's meeting response team was operated with a focus on preparing a plan for Lee Soo-man to return and the emergency meetings presided over by Lee Soo-man continued to be meaningless. The current management continued to resist and even after the production was over, SM has to pay 6% royalties on sales related to previously released albums for 70 years and 3% of management sales for 3 years from 2023. The total amount is estimated to be about 80 billion won."
"The ''It's ok, we have tree-planting." This word is a popular meme among SM executives and staff these days. From long ago, Lee Soo-man has emphasized the development of a smart entertainment music city with themes like EDM festivals, auditions, local entertainment industry development such as producing and construction of drone stations. At Lee Soo-man's request, we signed MOUs or held meetings with relevant ministries in various countries and this was widely reported in press releases as K-Culture's entry into the overseas market."
"At some point, Lee Soo-man suddenly started emphasizing tree planting and insisted that K-pop festivals be linked to tree planting that should be held in each country. Lee Soo-man's true desire was a real-estate empire behind the message of planting trees, sustainability, or ESG and the call for new market development and cultural exchange."
"What's even more serious is that he wanted to construct a Music City. He adamantly insisted that it was connected to the casino and you could legally smoke marijuana so that many tourists can enjoy casinos and festivals more. His intent was to create a Lee Soo-man World in each country that could generate profits by utilizing SM's infrastructure and staff. He would then use SM artists to publicize and promote the business."
"Regarding the tree planting. Aespa's album was scheduled for around February 20, 2023. Moreover, the first concert after debut was scheduled for February 25, and 26 of the same month in time for the release of their new album. The real reason behind the delay was planting trees. In other words, Lee Soo-man strange greed and stubbornness for his business empire was the true reason behind the delay."
"Since last year, Lee Soo-man has continuously advocated for K-pop festivals with 'tree planting' at the fore front and started suddenly emphasizing sustainability saying that "we need to carry out tree planting campaigns in various countries." Afterwards on January 1, 2023, the Sustainability Forum was held and the song called The Cure where all the leaders of SM groups participated came out. Fans couldn't understand the meaning and lyrics of the song of it at all. Lee Soo-man instructed the A&R team and director Yoo Young-jin to project tree planting, sustainability, and ESG into the lyrics of all major and important songs that will come out of SM. Even aespa, with a well-crafted world view, will sing a song with lyrics that project his tree planting that doesn't fit at all. He really ordered that."
"Some of the lyrics include words such as 'Just sustainability,' 'Lower even 1 degree,' 'co-prosperity,' and 'Greenism.' And in fact, the word 'planting trees' directly appeared in the lyrics at an early stage which made the aespa members really upset and distressed that they asked the A&R Team, "Please, let's exclude the word 'planting a tree.' The co-representative decided that the release of aespa's song should be canceled. That's how aespa's comeback got delayed."
Additional source(s): OSEN, Yonhap News,