Min Hee Jin is a candidate to be SM’s new director? SM employees support the current management
As HYBE is making a tender offer to small shareholders of SM to acquire the management rights of SM, rumors are also circulating at the same time.
According to the K-pop industry on February 13th, the tenure of SM directors, including SM co-CEOs Lee Sung Soo and Tak Young Jun, will expire on March 27th.
Co-CEOs Lee and Tak, who rebelled against former executive producer Lee Soo Man and formed a strategic alliance with Kakao, recommended Lee Chang Hwan, CEO of Align Partners, the activist fund that drove out Lee Soo Man, as a non-executive director, and announced that three new outside directors recommended by Align would also be appointed to the board of directors.
It is important for HYBE, which is buying the former controlling stake, to increase its stake through a tender offer to prevent the current SM management from appointing directors. It is reported that Chairman Bang Si Hyuk and CEO Min Hee Jin of ADOR could be put forward as a reason to persuade shareholders.
From the standpoint of HYBE, Chairman Bang and CEO Min are cards that can be used as weapons. As the most famous figures in the K-pop industry, they are enough to win the vote of general shareholders. In particular, CEO Min, the producer of NewJeans, one of the top 4th gen girl groups, was previously SM’s creative director.
CEO Min is a prominent figure in the K-pop industry for the past 20 years. In particular, she is known as a pioneer who brought the keywords ‘visual directing’ and ‘concept’ to the surface of the K-pop industry. When she was in SM, she gave unique visual images to f(x), Red Velvet, EXO, Girls’ Generation, and SHINee.
Through SHINee, she also led the project of the symbol and world view of EXO. CEO Min Hee Jin, who joined SM in 2002 as a public employee, rose to the position of creative director before leaving SM. After she left SM in 2018, she joined HYBE as Chief Brand Officer (CBO) and debuted as a producer while serving as the head of ADOR, the first label the company established in Korea. Since then, she has been on a winning streak with the great success of NewJeans.
Min Hee Jin is reportedly qualified as a future director of SM. As she is focused on breaking the K-pop formula, there is also an expectation that she will breathe new life into SM. However, there is also a burden for her.
HYBE is buying a lot of shares from former general manager Lee Soo Man, SM’s largest shareholder, but there is also a view in the industry that the situation is not completely bad for the current management of SM. In particular, even if Kakao Entertainment, which has recently received an investment from Saudi Arabia and took live ammunition, takes an active step in the tender offer, there is a slight possibility of winning. However, Kakao has yet to show any progress.
The current management of SM is showing a silent move, such as donating 200 million won under the name of SM for earthquake relief in Turkey and Syria on this day, while simultaneously reading and rallying the employees. Excluding some former executives, many of the current SM employees are known to support the current SM management. There are many opinions from SM employees that they believed in the alliance between Lee, Tak, and Kakao more than Lee Soo Man and HYBE. The ratio is about 85% to 15%. In fact, after actor Kim Min Jong, director of SM C&C, sent a company-wide email defending Lee Soo Man, the majority of the employees’ opinions were critical of him and Lee. Previously, SM Co-CEOs Lee and Tak and 25 people in higher positions expressed their position that they were “opposed to all hostile M&As” from HYBE.
On the other hand, Vice President Cho Byung Gyu, SM General Counsel, said in an explanation of the management rights dispute that was shared with all employees this afternoon, “HYBE is actually conducting friendly M&A. Contrary to the will of the major shareholder (Lee Soo Man), it is Kakao and the current SM management who joined hands with Kakao that want to increase their stake.”
Regarding the “hostile M&A”, Vice President Cho said, “It means ‘an unfriendly merger and acquisition conducted against the will of the management, without the cooperation of the management.’ It is not a board of directors. It refers to the current major shareholders and forces who exercise management rights covered by the Commercial Act and Capital Market Act above.” At the same time, he added that SM’s current management did not discuss a word with Lee Soo Man in the process of forming a strategic alliance with Kakao, and he was notified by SM that his contract would not be renewed after March 1st.
Source: Nate.
