SM Entertainment is now facing an internal conflict after its founder, Lee Soo Man, sued the company's current Co-CEOs, Lee Sung Soo and Tak Young Jun. As Sung Soo is Soo Man's nephew, the former is believed to have put the latter's position in the firm in danger.
Rumors have it that this feud is only brought about by Sung Soo's rebellion against his uncle, who happens to be the biggest shareholder of the label. The younger Soo is working to improve SM Entertainment's operation structure and reportedly trying to put Soo Man out of the picture.
Announcing the Shares' Sale
SM recently announced its plan to sell a 9.05% stake, accounting for about 1.23 million shares, to Kakao at 91,000 KRW or $72.16 per share with a total of 217.1 billion KRW or $172.3 million.
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Through the 105.2 billion KRW or $83.4 million convertible bonds, Kakao can even have an additional 1.14 million shares. Hence, Kakao can become the second largest shareholder in SM Entertainment, following Soo Man, who owns 18.46% shares, which is only about 10% greater than what Kakao owns.
The Making of SM 3.0
Aside from the shares' sale, SM also announced the making of SM 3.0, the company's future growth plan.
SM 1.0 happened from 1995 to 2010, when Soo Man established the firm, while SM 2.0 occurred when he resigned from management and worked as a producer instead through his company, Like Planning.
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Now that Soo Man resigned as the company's producer, SM announced SM 3.0, which will see the company's IP creation and production expansion to the global market. It also plans to advance its music publishing business and multi-label system.
Now that Kakao has entered and become the second-largest shareholder of SM, the market believes Soo Man's position as the lead shareholder is in danger, and Sung Soo is believed to be behind it, per AllKpop.
Lee Sung Soo Versus Lee Soo Man
Sung Soo became SM's co-CEO with Tak Young in 2020. He, too, is the head of the office, group, and producing division under his uncle and registered director.
Since he stepped down from SM's operation, Sung Soo was Soo Man's, right-hand man. With this feud, many see what Sung Soo is trying to do.
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Some point out that Sung Soo's action threatens Soo Man's position in SM. The company's current management wants to start a new era for SM, and the only possible way to do it is to allegedly remove Soo Man from his post.
Though many criticize Sung Soo and Tak Young for making a major decision without consulting Soo Man, considering he's the company's largest shareholder, some understand that they only do it for the best interest of SM's future.
For more Lee Sung Soo and Lee Man Soo news, stay tuned to EpicStream!