Dispatch Details 118 Facts And Statements Related To The Dispute Between Lee Soo Man, SM Entertainment, And Lee Sung Soo

Dispatch went deep.

Dispatch has detailed a lengthy, 118 point list of facts and statements regarding the ongoing dispute between Lee Soo Man, founder of SM Entertainment, and Lee Sung Soo, currently the co-CEO of SM Entertainment.

The translation below retains Dispatch’s quirkiness and style in narrating.

1. Lee Soo Man. His initials, as we know, are SM.

2. SM Entertainment had plans to be listed on the KOSDAQ stock exchange in 1999.

3. At that time, the requirement for being listed was ₩1.00 billion KRW (about $775,000 USD) in capital. But in 1999, SM Entertainment’s capitalization was only ₩50.0 million KRW (about $38,800 USD).

4. SM Entertainment had to increase their capital. They needed money. To do this, the company issued new stocks, increasing their capitalization to ₩1.15 billion KRW (about $892,000 USD).

5. Lee Soo Man had his hand in company funds. He withdrew ₩900 million KRW (about $698,000 USD) from SM Entertainment’s account and ₩250 million KRW (about $194,000 USD) from SM Enterprise’s account.

6. Lee Soo Man used this money to pay for the ₩1.15 billion KRW (about $892,000 USD) needed to increase the company’s capitalization.

7. In other words, it was a disguised payment.

8. Lee Soo Man took the money out of SM Entertainment and put it back into SM Entertainment.

9. SM Entertainment’s take off came from Lee Soo Man’s embezzlement.

A capital increase is used to attract funds from outside investors into the company. However, in the case of disguised payment, no new money actually entered the company. He took the money out from the company and put it back in, making a net zero. This is an act of deceiving investors as if the company attracted an investment. This is basically fraud.

— Stock exchange official

10. Around March 2000, Lee Soo Man’s stake in SM Entertainment was 66.99%. He had 1,607,800 shares. 4% was owned by his father, 3.3% was owned by his mother.

11. In April 2000, SM Entertainment became listed on the KOSDAQ stock exchange with a public offering price of ₩12,000 KRW (about $9.30 USD). On June 9, 2000, SM Entertainment held a market capitalization of ₩180 billion KRW (about $140 million USD). The value of the company had more than quadrupled.

12. The ₩1.15 billion KRW (about $892,000 USD) taken by Lee Soo Man. How much did that grow in a year? It was calculated to end up around ₩90.0 billion KRW (about $69.8 million USD). As of June 2000, Lee Soo Man held 53.59% of the stocks for SM Entertainment.

13. In January 2003, Lee Soo Man was placed on Interpol’s wanted list. He returned to Korea voluntarily in May 2003 and was questioned by prosecutors. He was sentenced to three years probation with two years in prison should he violate the probation.

14. Dispatch was able to secure the documents sharing the court’s ruling at the time.

Lee Soo Man embezzled ₩1.15 billion KRW (about $892,000 USD) in company funds and used them to buy shares in the company. He pretended to pay for the shares without proof of actually using the capital but it was reported as if the total capital of the company had increased. Due to the serious nature of the crime, a punishment corresponding the severity of the crime is inevitable.

— Court ruling

15. But wait, what was Lee Soo Man’s position on this? There was a “shield” defending him.

Lee Soo Man is not the only one who took money from the company. He did not do this on his own. It was decided at a meeting between the executives of the company and Lee Soo Man took the reigns. Also, he paid back the amount right away.

— Lee Soo Man’s “shield”

16. Dispatch was able to secure a conversation with a person who was an executive at SM Entertainment at that time.

There was a disguised payment made for the purpose of getting listed on the stock exchange. We didn’t hold a board meeting. The meeting notes were just hastily made at the attorney’s office. Everything was done under Lee Soo Man’s direction. When the investigation began, Lee Soo Man hurriedly paid back the rest of the money.

— Former SM Executive “A”

17. Lee Soo Man took ₩1.15 billion KRW (about $892,000 USD) from the company. However, that money was returned in profits that were 40 times, no, 400 times the amount.

18. For example, here is how Lee Soo Man and his parents made money from SM Entertainment’s stocks.

19. Between November 28 and December 18, 2001, Lee Soo Man sold 100,000 shares of SM Entertainment stock. The average selling price of the shares was ₩9,900 KRW (about $7.68 USD). Thus, he “robbed” the market of almost ₩1.00 billion KRW (about $775,000 USD).

20. Between May 16-18, 2001, Lee Soo Man’s mother sold 80,000 shares with an average price of ₩11,900 KRW (about $9.23 USD).

21. Lee Soo Man’s mother earned nearly ₩1.00 billion KRW (about $775,000 USD) thanks to her son.

22. The year is 2005. The year Lee Soo Man and his father became rich.

23. First of all, this was Lee Soo Man’s father’s “departure” from SM Entertainment. On June 20, 2005, he sold the remainder of his shares in the company.

24. He sold 157,618 shares at an average price of ₩34,600 KRW (about $26.80 USD). The profit from this sale came out to ₩5.45 billion KRW (about $4.23 million USD).

25. Lee Soo Man also sold 312,382 shares to the public market. At an average price of ₩33,500 KRW (about $26.00 USD), that totals ₩10.5 billion KRW (about $8.14 million USD) worth.

26. Lee Soo Man and his father pocketed ₩15.9 billion KRW (about $12.3 million USD) in June 2005 alone.

27. Still, Lee Soo Man held a 43.87% stake in SM Entertainment with over 2.07 million shares in the company.

28. The next thing will be about how Lee Soo Man increased his stock.

29. On April 9, 2002, SM Entertainment merged with ForME, which became SM Enterprise. ForME was owned by Lee Soo Man and was a management company. The trick that he used with this company will be explained in point 86.

30. Lee Soo Man received 870,000 new shares after he “gave” ForME to SM Entertainment. This increased his total number of shares to 2.38 million and his total stake to 54.8%.

31. On June 20, 2005, Lee Soo Man sold 312,382 shares and conducted a 100% free capital increase per share on July 8. A free capital increase is where shareholders will receive new shares of the same company based on a ratio set by the company. Thus, the number of shares held increased to 4,386,866.

32. On November 24, 2005, Lee Soo Man sold 800,000 shares during after-hours trading. The price per share was ₩13,300 KRW (about $10.30 USD), totaling ₩10.6 billion KRW (about $8.22 million USD).

33. Two months later, SM Entertainment conducted a paid-in capital increase related to shareholder allocation. Paid-in capital increase refers to a company raising money by issuing stock to investors. Lee Soo Man was allocated 673,741 shares. The price was ₩9,020 KRW (about $6.99 USD), worth a total of ₩6.10 billion KRW (about $4.73 million USD).

34. With this maneuver, Lee Soo Man became a genius.

35. He sold his shares at a value of ₩13,300 KRW (about $10.30 USD). But the shares were re-introduced at a price of ₩9,020 KRW (about $6.99 USD).

36. On December 15, 2010, Lee Soo Man sold 500,000 more shares. The selling price was ₩15,700 KRW (about $12.10 USD) per shares. It was sold to a Hong Kong based fund. Lee Soo Man secured ₩7.80 billion KRW (about $6.05 million USD).

37. SM Entertainment was Lee Soo Man’s never-ending fountain of money.

38. Lee Soo Man sold stock at a high price and then would issue new stocks, and would buy back his stocks at a cheaper price. For example…

39. On January 12, 2012, Lee Soo Man sold 400,000 shares at ₩44,200 KRW (about $34.30 USD) each for a total of ₩17.7 billion KRW (about $13.7 million USD).

40. On March 28, 2012, Lee Soo Man bought 351,597 shares at a price of ₩40,200 KRW (about $31.20 USD). He then carried out a free-capital increase and received an additional 399,306 shares free of charge.

41. In the end, finally…

42. Lee Soo Man handed over 14.5% of his stake to HYBE for ₩423 billion KRW (about $328 million USD). 3,523,420 shares were transferred. The unit price was ₩120,000 KRW (about $93.00 USD) but Lee Soo Man still has 868,947 shares left.

43. When Lee Soo Man was cornered, he sold his stake in SM Entertainment to HYBE. He threw his remaining shares at HYBE.

44. Lee Soo Man embezzled money and listed SM Entertainment on the stock exchange. He has sold hundreds of thousands of shares and collected over ₩450 billion KRW (about $349 million USD), excluding the value of the shares he still currently holds but will eventually sell off.

45. Lee Soo Man’s talent for making money is good. But next, is the company Like Planning.

46. In 1995, Lee Soo Man founded SM Entertainment. In 1997, Lee Soo Man founded both Like Planning and SM Enterprise.

47. In April 2000, Lee Soo Man released shares of SM Entertainment to the public. Like Planning and SM Enterprise were affiliate companies to SM Entertainment.

48. Dispatch took a look at the company introduction that SM Entertainment submitted to the stock exchange.


SM Enterprise is the management company for our artists. SM Entertainment pays 20% of the album sales of our artists to SM Enterprise as commission.

— SM company introduction

50. .

Like Planning is in charge of music consultation and production of SM’s artists. SM Entertainment pays 15% of the album sales to Like Planning as commission.

— SM company introduction

51. SM Entertainment’s tragedy begins here. First of all, Like Planning.

52. Even after SM Entertainment’s stock listing in 2000, Like Planning provided production services to SM Entertainment.

53. Lee Soo Man was a registered director at SM Entertainment. At the same time, he was the executive producer. So he was receiving a salary from SM Entertainment.

54. However, did he also receive a separate payment for producing? The 15% of album sales? Remember, that was 15% of album sales, not profit.

55. Just how much did Like Planning earn?

56. In 2000, SM Entertainment paid ₩2.10 billion KRW (about $1.63 million USD) for services to Like Planning. That same year, SM Entertainment’s operating profit was ₩1.85 billion KRW (about $1.43 million USD). Like Planning won out.

57. For the next 22 years, SM paid Like Planning for their services. In 2015, the service fee was renamed to a licensing fee.

58. How much did Lee Soo Man make in total from this?

59. In short, ₩174 billion KRW (about $135 million USD).

60. A more detailed breakdown is as follows:

2000 – ₩2.09 billion KRW (about $1.62 million USD)

2001 – ₩1.62 billion KRW (about $1.26 million USD)

2002 – ₩2.38 billion KRW (about $1.84 million USD)

2003 – ₩870 million KRW (about $674,000 USD)

2004 – ₩1.87 billion KRW (about $1.45 million USD)

2005 – ₩1.36 billion KRW (about $1.05 million USD)

2006 – ₩1.45 billion KRW (about $1.12 million USD)

2007 – ₩1.28 billion KRW (about $993,000 USD)

2008 – ₩2.02 billion KRW (about $1.57 million USD)

2009 – ₩3.53 billion KRW (about $2.73 million USD)

2010 – ₩6.20 billion KRW (about $4.81 million USD)

2011 – ₩4.77 billion KRW (about $3.70 million USD)

2012 – ₩6.36 billion KRW (about $4.93 million USD)

2013 – ₩7.46 billion KRW (about $5.79 million USD)

2014 – ₩7.46 billion KRW (about $5.79 million USD)

2015 – ₩9.89 billion KRW (about $7.66 million USD)

2016 – ₩11.0 billion KRW (about $8.56 million USD)

2017 – ₩10.8 billion KRW (about $8.40 million USD)

2018 – ₩14.5 billion KRW (about $11.3 million USD)

2019 – ₩15.1 billion KRW (about $11.7 million USD)

2020 – ₩12.9 billion KRW (about $10.0 million USD)

2021 – ₩24.1 billion KRW (about $18.7 million USD)

2022 – ₩25.5 billion KRW (about $19.8 million USD)

61. How can Like Planning even be justified?

62. According to Lee Soo Man, Culture Technology. In short, the price is Lee Soo Man’s know-how.

63. All of the intellectual property of SM Entertainment is made with Lee Soo Man’s cultureal technology, so they have to pay him for that, right?

64. Lee Soo Man defined himself as the source for all of SM Entertainment’s artists. Therefore, 6% of SM Entertainment’s total sales were taken under the guise of licensing costs.

65. On March 28, 2022, Lee Sung Soo appeared on SamproTV. Lets go back to that time, 1 year ago.


Why is 6% of SM Entertainment’s sales transferred to Like Planning?

— SamproTV


SM Entertainment is a company that creates, commercializes, and expands its core IPs. SM Entertainment declared themselves a virtual country in 2012. They were looking ahead 10 years into the future for business. This is the basis of SM’s production. It is Lee Soo Man, the executive producer, the only one who can do this.

— Lee Sung Soo


Is there any uniqueness in SM’s production? What only Lee Soo Man can do, but not J.Y. Park or Bang Si Hyuk?

— SamproTV


Should all chefs be paid the same? That can’t happen. You should be able to see the song lyrics, one singular word, the future of the IP itself, all of that. SM needs eyes that can fully understand the industry to create the best content. We have already been doing this for the past 30 years.

— Lee Sung Soo


Is this often the case overseas?

— SamproTV


We are not a communist nation, are we? This is a country where free contracts are allowed. The contract was referred to an external advisory board and an appropriate rate of 6% was decided. I’m sorry, but we have been doing this for over 20 years and other newcomers in the industry don’t do this, so we should change it? I’m not sure about that.

— Lee Sung Soo

72. Co-CEO Lee Sung Soo stated that he would add one more detail.


A company wants to do global entertainment business. Who do you need? Wouldn’t you want to recruit Lee Soo Man? You would have to pay him 6% of sales to recruit him. I think I would be able to sign that deal.

— Lee Sung Soo

74. SM Entertainment gave this money to Lee Soo Man using this type of logic.

75. But what was the damage of SM’s logic?

76. Between 2002-2004, SM recorded a deficit within their finances. In particular, in 2004, even their operating profit was in the red at minus ₩588 million KRW (about $456,000 USD).

77. However in 2004, Like Planning received ₩1.87 billion KRW (about $1.45 million USD) in service fees. If the money was not paid to Like Planning, SM would have instead had an operating profit of ₩1.20 billion KRW (about $930,000 USD).

78. SM’s operating profit returned to the green in 2005. In March 2005, the stock price soared from around ₩2,000 KRW (about $1.55 USD) per share to ₩17,000 KRW (about $13.20 USD) per share.

79. But it later plummeted. In 2006, 2007, and 2008, SM Entertainment once again was in the red for operating profit, losing money overall.

80. In particular, 2008 looks especially unfair from the perspective of the shareholders.

81. In 2008, SM’s operating deficit was ₩1.69 billion KRW (about $1.31 million USD), yet the company also paid Like Planning ₩2.02 billion KRW (about $1.57 million USD).

82. What if Lee Soo Man’s service fees didn’t have to be paid? The company would have profited ₩326 million KRW (about $253,000 USD) on the year.

83. In October 2008, SM Entertainment’s stock fell to a measly ₩833 KRW (about $0.65 USD) per share. Would anyone be persuaded by the statement that not all chefs should be paid the same?

84. Lee Soo Man’s creative malpractice was also shown through SM Enterprise.

85. SM Entertainment itself is a management company. However, when Lee Soo Man took the company public in 2000, he operated a separate management service company called SM Enterprise.

86. The singers that SM Enterprise managed included H.O.T., S.E.S., Shinhwa, Fly to the Sky, BoA, and more.

87. SM paid 20% of the album sales to SM Enterprise in the name of management service expenses.

88. The money sent to SM Enterprise totaled ₩5.96 billion KRW (about $4.62 million USD) over three years: ₩2.78 billion KRW (about $2.15 million USD) in 2000, ₩2.13 billion KRW (about $1.65 million USD) in 2001, and ₩994 million KRW (about $771,000 USD) in 2002.

89. Lee Soo Man merged SM Entertainment and SM Enterprise in 2002. At that point, no more money was sent to SM Enterprise.

90. Lee Soo Man’s greed was becoming world-class, He established a company overseas and developed Like Planning season 2.

91. In 2019, Lee Soo Man formed CT Planning Limited in Hong Kong.

92. CT Planning Limited was Lee Soo Man’s logic and counter. A place where 6% of sales can be deducted from overseas and logically, 6% of sales can be justified in Korea.

93. SM Entertainment launched SuperM globally in 2019 in partnership with Capitol Music. In 2022, aespa was introduced to the United States’ market alongside Warner Records.

94. Lee Soo Man is known to have asked both companies for 6% of the sales under the guise of production fees.

95. According to Lee Sung Soo, the licensing cost of 6% of sales was sent to Lee Soo Man’s overseas company, CT Planning Limited. This was tax evasion.

96. So is SM Entertainment a conspirator or a bystander? Back to SamproTV.


Does Lee Soo Man get his 6% of sales anywhere other than SM?

— SamproTV


Of course. We released SuperM’s album in collaboration with the Beatles’ label Capitol Records. They also pay 6% royalties to Lee Soo Man.

— Lee Sung Soo

99. Point 99 mysteriously does not exist on Dispatch’s article.

100. Show me the Money

101. How much money did Lee Soo Man take out of SM Entertainment’s wallet?

102. His remaining stocks, 868,948 shares, were calculated at the closing price of ₩132,000 KRW (about $102 USD) as of February 16, totaling ₩115 billion KRW (about $89.2 million USD). He got ₩173 billion KRW (about $134 million USD) from Like Planning and ₩5.90 billion KRW (about $4.57 million USD) from SM Enterprise.

103. Lee Soo Man took ₩744 billion KRW (about $577 million USD) from SM Entertainment over a span of 23 years.

104. Lee Soo Man is greedy as ages. Is SM gaslighting?


License costs reduce profit margins? That is true when it comes to the  numbers. But what if you think like this. He has been producing for 30 years since 1995. H.O.T., Shinhwa, S.E.S., TVXQ, f(x), and more recently, aespa and GOT the Beat, over 90% of his ideas have succeeded. This is unprecedented in this world. Does such a producer exist? Yes. That producer is Lee Soo Man. By paying 6% of the sales, the profit margin may decrease. But the company is making a bigger slice of the pie. We can accept paying for that.

— Lee Sung Soo

106. An even bigger pie made by SM? Whose mouth is that pie feeding?

107. Lee Soo Man opened his mouth. And SM Entertainment’s past and present executives put the pie into his mouth.

108. At the time, he didn’t know that the money was to be returned to the shareholders.

109. Lee Soo Man was not stabbed in the back by his nephew, Lee Sung Soo. Lee Soo Man’s greed fostered Lee Sung Soo’s anger.

110. SM Entertainment’s current management does not need to be upset, as if they only just realized what happened.

111. Just one year ago, they were acting as Lee Soo Man’s representatives, not the CEO’s.


Lee Soo Man is retiring? I don’t know if I will be able to find someone else like him. That is my biggest worry.

— Lee Sung Soo

113. In 2021, SM’s sales were ₩41.7 billion KRW (about $32.3 million USD) and the operating profit was ₩74.0 billion KRW (about $57.4 million USD). The licensing fee paid to Lee Soo Man was ₩24.1 billion KRW (about $18.7 million USD).

114. SM’s operating profit ratio is about 17% of its total sales. If the ₩24.1 billion KRW (about $18.7 million USD) was not taken out, the operating profit ratio would rise significantly, to 23%.

115. SM Entertainment paid ₩6.00 billion KRW (about $4.65 million USD) to four registered executives in 2022. Lee Sung Soo and co-CEO Tak Young Joon each received ₩1.80 billion KRW (about $1.40 million USD).

116. SM’s operating profit ratio is the lowest amongst the big 3 of SM, JYP, and YG. However, the payment for the company’s directors is the highest. The irony.

117. What if the company put shareholder interests first? SM’s price-to-earnings ratio would have been at least 25 times more that it was.

118. Lee Soo Man is not in SM Entertainment anymore. The revelation about his actions is welcome, but reflection from the company’s management should also be welcomed.

Source: Dispatch

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