Will HYBE Replace SM's Current Authorities? Here's What We Know So Far
HYBE has made a statement, requesting voting rights from SM Entertainment's minority shareholders.
Will HYBE be replacing SM Entertainment's current management?
Does HYBE Doubt SM Entertainment's Current Management? Here's What They Said
On February 24, HYBE asked for voting rights from SM Entertainment's minority shareholder, in advance of their general meeting.
The company's Articles of Incorporation will be amended at the upcoming meeting to reflect the standards and suggestions of Korea ESG, as well as the auditors and directors for new management.
HYBE firmly expressed that since SM Entertainment is a pioneer in the K-pop industry, they assured that its governance must be regulated by executives who displays steady professionalism, independence, and high levels of integrity.
According to sources, HYBE suggested SM Entertainment should transfer its voting authority to the board of directors that HYBE suggested, rather than to SM's current management.
They elaborated that the decision to move voting rights is rooted from questions regarding validity, in terms of legal matters.
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For its governance, HYBE recommended Lee Jae Sang (HYBE America CEO), Jeong Jin Soo (HYBE CLO), and Lee Jin Hwa (HYBE's Management Planning Director), the three individuals that Hive has proposed for inside director positions.
The three outside director candidates are Lim Dae Woong, a representative of the United Nations Environment Program (UNEP) Finance Initiative Korea, Hong Soon-man, a professor from Yonsei University who specializes in public management, and Gangnam-kyu, a Gaon Law Firm lawyer.
It also included Park Byeong Moo (VIG Partners CEO), and accountant Choi Kyu-Dam were suggested by Hive for non-executive director and auditor, respectively.
See their statement below:
"As a leader in the Hallyu Wave and a pioneer of Korean entertainment, SM Entertainment is on the verge of challenging the top three record labels in the world."
"It is essential for the company to establish an excellent governance structure, with executives that are professional, independent, and honest in order to achieve this goal."
"Lately, questions are being raised about the will to comply with the law, such as causing controversy over illegality in the process of issuing new stocks and convertible bonds or purchasing treasury stocks."
SM Entertainment CFO Jang Cheol Hyuk Calls Out HYBE For 'Hostile Takeover'
On February 20, SM Entertainment uploaded a video, featuring its CFO (Chief Financial Officer) Jang Cheol Hyuk.
In the video, the CFO enumerated several points as to why HYBE's acquisition is considered as a "hostile takeover," engaging netizens' curiosity. Cheol Hyuk revealed that the alleged antagonizing nature of its acquisition, is because of lack of disclosure with SM's current board.
Aside from SM's current BOD (board of directors), the CFO also claimed how HYBE also missed out communicating with the M&A (Mergers and Acquisition).
The CFO also called out its effect on K-pop as a whole, raising concerns on ticket prices because of the monopoly. He also recommended HYBE to clarify what kind of "synergy" are they trying to achieve with SM's shares.
In response, HYBE publicized an open letter, clarifying their intentions with SM's merge.
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