After Dispatch released shocking information about the SM founder’s crime, he has also given an official response.
After the current SM CEO accused Lee Soo Man of delaying aespa’s comeback, having plans for casino and weed business, and “colluding” with HYBE, SM Entertainment fell into a deep crisis. Previously, the SM founder and former chairman Lee Soo Man reportedly sold his 14.8% share to HYBE Labels, causing the current CEO Lee Sung Soo to make a video detailing Lee Soo Man’s alleged crimes.
Adding to the situation, on February 17th, Dispatch published an exclusive article that revealed even more information regarding Lee Soo Man’s misdeeds. In particular, according to Dispatch, Lee Soo Man have “swallowed” 744.3 billion won from SM Entertainment over 23 years, was wanted by Interpol, and sentenced to years in prison as well as probation.
In particular, SM Entertainment planned to be listed on the Korean stock exchange platform KOSDAQ in 1999. At the time, the listing requirement was over 1 billion won in capital, but SM’s capital was only 50 million won. As a result, a capital increase to 1.15 billion was carried out.
However, Lee Soo Man withdrew 900 million won from the SM Entertainment savings account, and 250 million won from the SM Enterprise bank account. He then became the biggest shareholder of SM by using this money to purchase SM stocks. With this, the SM founder deceived investors by pretending that the company was attracting investments, when in reality no money actually flowed into the agency.
In the end, as of March 2000, Lee Soo Man’s share amounted to 66.99%, his mother also owned 3.3%, and his father 4%.
In June of the same year, SM’s market capitalization was about 180 billion won. As Lee Soo Man’s ownership was 53.59% at the time, he has increased the stolen 1.15 billion won to over 90 billion won.
In 2002, Korea’s prosecution found evidence that Lee Soo Man was receiving illegal earnings from the stock market. He also faced charges of bribing producers at broadcasting stations and having massive amounts of cash in his office and personal safe. In June of the same year, Lee Soo Man traveled outside the country to evade his trial, but was found in Los Angeles, the USA in August. At the time, he was put on Interpol’s wanted list, and his passport became invalid.
In the end, Lee Soo Man voluntarily returned back to Korea in May 2003 and was questioned in October of the same year. In front of the court, Lee Soo Man defended himself by saying he was not the only one involved in the embezzlement. He had paid back the embezzled money. Yet the supreme court of Korea still ruled that Lee Soo Man had to receive 2 years in prison and 3 years in probation.
In 2007, Lee Soo Man was released in a special exemption in commemoration of the 4th year of Roh Moo Hyun’s presidency.
Another former executive of SM revealed that the embezzlement process was actually under the direction of Lee Soo Man. Only when the prosecutors started the investigation did Lee pay back hastily the money. The initial embezzled amount of 1.15 billion won has increased by 400 times.
Dispatch concluded that Lee Soo Man’s family accumulated wealth through stock listing. They got exceptionally wealthy in 2005 thanks to a strategy of high selling and low buying. He manipulated the stock by selling them at a high price and issuing new stocks so he could buy back SME stocks at a cheaper price. The total amount Lee Soo Man has misappropriated from SM Entertainment from the last 23 years is a whopping 744.3 billion won.
After Dispatch released the detailed 118 point list, a representative for Lee Soo Man said concisely: “We have nothing to say.” Currently, the exposé is the talk of the town across social media.