SM Denies Rumors Of Kakao’s Selling & Management Replacement Plans, “We’re Pursuing Mutual Growth”
On February 5th, SM Entertainment made a press release, saying “A notice to our shareholders and stakeholders regarding recent media reports”. They said, “Various media have been reporting and spreading groundless speculations and rumors about our company since November 2023, which seriously damaged the image of our company”.
Regarding their investment in Kreation Music Rights (KMR), SM explained, “KMR is a company established in 2023 as one of the focuses for investment in the SM 3.0 strategy to promote the publishing business and our multi-label strategy. Before the launching of SM 3.0, SM had been producing music through collaborations with writers around the world through CTGA (Culture Technology Group Asia), a 100% private company owned by former executive producer Lee Soo-man”.
They continued, “Based on the global networks with music writers that we have accumulated over the past 25 years, SM decided to establish KMR with the aim of developing into a competitive publishing company that can provide quality music to SM artists and even further to the entire K-pop ecosystem. In addition, KMR will pursue synergy”, adding “As such, KMR has been exploring various investment and acquisition opportunities for its establishment. In this process, we came to acquire The Hub and TenX”.
Next, SM mentioned the investigation by Kakao Audit Committee. They said, “The audit committee into Kakao requested a substantial amount of data from our company regarding the preparation of Kakao’s consolidated financial statements starting from early December 2023. This included requests for PC forensic analysis of key executives. While there were significant questions and regrets regarding the scope and method of these requests, our company tried to cooperate to the fullest extent to provide accurate understanding.”
Lastly, SM firmly refuted the rumors of Kakao selling SM. The agency said, “Regarding this rumor, which has been reported by numerous media outlets, Kakao already released an announcement on January 29, 2024, saying that it was not true at all. Some media reports even spread the information about changes in our management system. However, according to our communication with Kakao, Kakao is not considering any management changes. Our company is maintaining close business cooperation with Kakao and Kakao Entertainment to pursue mutual growth and create synergy”.
Source: Nate
