SEOUL, March 8 — It is the kind of K-drama that rivets millions of viewers — bitter boardroom battles, expensive lawyers, hostile takeover claims and high-stakes shareholder meetings.
He used that stake to argue for corporate reform, saying that SM founder Lee Soo-man — the so-called Godfather of K-pop — was, in effect, syphoning off millions of dollars every year in bogus consulting fees. Lee Soo-man’s pet company had raked in “nearly 160 billion won over the past 20 years”, he said, as SM risked major financial and reputational damage due to the behaviour of its founder.Lee Soo-man not only created individual K-pop bands in the 1990s such as H.O.T. and S.E.S., whose success arguably laid the groundwork for the stratospheric rise of groups like BTS and BlackPink, he came up with the industry’s whole modus operandi.
In an apparent fit of revenge, Lee Soo-man sold the majority of his stake in SM — 14.8 per cent of the company — to one-time rival Hybe, the agency that manages BTS, for US$325 million. Accusing his uncle of tax fraud using overseas companies, he demanded the elder Lee “kneel down and apologise” for his alleged crimes.
Experts say the drama is an illustration of a perennial problem in South Korea’s dynastic chaebols: founding families exerting control through a complex web of crossholdings, allowing them to wield unchecked power despite not holding controlling shares.
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