Source: Seoul Economy
HYBE is under controversy for underhanded "tricks" to acquire SM Entertainment rights.
According to a leaked stock purchase agreement (SPA) between HYBE and Lee Soo-man obtained by Seoul Economy, HYBE acquired the former executive's shares, including Dream Maker and SM Brand Marketing, a subsidiary of SM, for a total of 70 billion won. This is the first time the exact acquisition amount of Lee Soo-man's subsidiaries has been revealed to the public.
Lee Soo-man and his kids and other related persons owned 24.14% of Dream Maker shares and 42.31% of SM Brand marketing but SM Entertainment was the largest shareholder in both companies. Dream Maker is responsible for concert production and scheduling and SM Brand Marketing is responsible for performance, MD production, and distribution.
The industry pointed out that operating profit of the subsidiaries is not large, the proportion of internal transactions with the parent company SM is high and SM's stake value already exceeds Lee Soo-man's therefore there was no need to acquire Lee Soo-man's stake and his family's on top of it.
HYBE's side insisted Lee Soo-man, "giving up managements rights in his subsidiaries for a premium was a "major win." In joint-statement with SM, HYBE explained that "in order to improve SM's governance structure, they came to an agreement with Lee Soo-man and the company."
However, in SM CEO's video titled, "Why SM opposes HYBE's hostile acquisition" released on the 20th, SM claimed "HYBE's purchase of subsidiary shares from Lee Soo-man through a "premium" was intentional and will damage shareholder value for SM investors."
The financial investment industry also sees the "additional money (premium)" paid by HYBE to Lee Soo-man as a "trick" to gain management rights.
It was further revealed that HYBE also signed a contract to provide a total of 10 billion won over the next 10 years to support Lee Soo-man's 'tree planting project.'
HYBE also announced on the same day that they plan to sell the two subsidiaries acquired from Lee Soo-man in the future. An investment banking industry insider pointed out, "if HYBE sells the two companies to SM at a high or cheap price, it will harm SM shareholders."
Meanwhile, it's expected that HYBE's "trick" to acquire SM management rights from Lee Soo-man through a "premium payment" will intensify and cause further controversy.
- [+854, -47] HYBE is seriously ridiculous too. Who would spend that much money simply to buy stocks ㅋㅋ. Their stock price has been halved since it's peak already. This underhanded "giving" and "receiving" [bribes] through vested interests is a quite sight to see.
- [+383, -25] Are Lee Soo-man supporters his part-timers? He created his own private company and sucked out profits from SM staff and shareholders like a leech and you're defending this..?
- [+330, -16] They're passing along dirty money to our faces..
- [+160, -13] Ah, this grandpa is quite talented..
- [+130, -8] Lee Soo-man's greed for money is seriously jjang.. he's a total gangster and thief!
- [+54, -2] At this point, shouldn't authorities be opening tax investigations into HYBE??
- [+48, -1] Looks like HYBE stepped on sh*t
- [+38, -5] I wonder what the kids defending Lee Soo-man and HYBE's shields are thinking. This is really who you're claiming is a 'white knight?' So this is the true reason why SM has been causing a fuss. I'm still speechless at people saying they won't touch their label companies. I'm sorry for making this analogy but this takeover fight is like the Japan-Korea Treaty of 1905.
- [+34, -7] HYBE put out cosplays claiming they're clean and innocent and got caught..ㅋㅋ
- [+30, -0] Lee Soo-man is quite the scammer..
- [+27, -4] Investigate Lee Soo-man's relationship with his Paper Company!! SM top-line and executives.. fighting!
- [+27, -0] So they got together with Lee Soo-man to play.. HYBE's quite 'stone headed' too it seems.
- [+21, -1] The winner is Lee Soo-man ㅋㅋㅋ