Dispatch has revealed the details behind Kang Daniel‘s dispute with LM Entertainment, revealing the involvement of MMO Entertainment and a mysterious Hong Kong agent known as Ms. Seol, who could be the person behind everything.
1. Kang Daniel Relies on LM Entertainment for his apartment security deposit
Kang Daniel was relying on LM Entertainment for support still. He made a request in October 2018 to LM Entertainment that he wanted to live in a high-end villa in Hannam-dong. LM Entertainment then asked MMO Entertainment for support. In the end, MMO Entertainment provided Kang Daniel’s security deposit of ₩950,000,000 KRW ($836,745 USD). It was also revealed Yoon Jisung‘s apartment deposit was ₩800,000,000 KRW ($704,628 USD), also provided by MMO. CJ E&M is the official name listed as the depositor.
Kang Daniel was aware of MMO Entertainment supporting him. He also knew that his deposit was set up with CJ E&M’s money. Dispatch revealed a conversation between Kang Daniel and LM Entertainment from October.
Kang Daniel: Ah, really? Can I move in?
LM Entertainment: As soon as the costs are sorted out, we can sign and you can move in.
Kang Daniel: ㅋㅋㅋ Wow I’m happy
LM Entertainment: They said the costs will be sorted out by Wednesday.
Kang Daniel: But where is the place?
LM Entertainment: UN [Village]
Kang Daniel: Ah ah! I will work hard.
Dispatch also revealed a conversation between Kang Daniel and LM Entertainment from December 2018, showing there may have been signs of conflict:
Kang Daniel: I’ll quickly pack up my stuff and clean up here.
LM Entertainment: We are in the process of doing work before the activities.
Kang Daniel: I have a bone to pick with LM.
In reality, there seemed to be no problems between Kang Daniel and LM Entertainment, until a mysterious figure appeared. That is when the conflict between Kang Daniel and LM Entertainment began.
2. Kang Daniel’s Hong Kong agent Seol X X (Ms. Seol) — The mysterious figure
The day is July 26, 2018. On this day, Kang Daniel met Ms. Seol in Hong Kong. She is a local agent who works as a proxy for Hallyu stars who are seeking advertisements, events, performances, or fan meetings.
Ms. Seol escorted Kang Daniel’s party around Hong Kong, taking them to Michelin star restaurants and helping him with his private shopping. She also set him up with a luxury hotel suite.
On January 7, 2019, Kang Daniel introduced her to LM Entertainment
Kang Daniel: I want to introduce you to Ms. Seol.
LM Entertainment: Let her know of my contract information.
Ms. Seol proposed several overseas projects to LM Entertainment for Kang Daniel. She asked for their cooperation for global advertising, overseas events and concerts, the manufacturing and distribution of goods overseas, and managing the operation of overseas fanclubs for him.
She predicted that one year of sales from overseas fans would bring in $21,000,000,000 KRW ($18,496,485 USD). Ms. Seol stated that the revenue would be split 70% to LM Entertainment, 30% to her. The profit was expected to be around 30% of the total revenue. To this proposal, LM Entertainment said they needed time to think about it, and would review the offer.
On January 31, 2019, Kang Daniel called Gil Jong Hwa, executive producer at Stone Music Entertainment, saying that he would have him talk to Ms. Seol. A short time later, Gil Jong Hwa received a message from Kang Daniel.
Ms. Seol’s words are my words.
— Kang Daniel
The message Ms. Seol sent to Gil Jong Hwa was short and clear.
I am here as Kang Daniel’s agent. Please show me his exclusive contract.
— Ms. Seol
Gil Jong Hwa told Dispatch about the situation at the time.
Kang Daniel called, and I also got a text message from him. Ms. Seol appeared as his agent. She wanted to see his contract.
— Gil Jong Hwa
3. The fight begins
On February 1, 2019, Kang Daniel became the enemy. Kang Daniel sent LM Entertainment a Proof of Contents Certification and called for the immediate suspension of his contract that he signed on February 2, 2018. The sender of the Proof of Contents Certification was Ms. Seol. She also enclosed a letter showing that Kang Daniel had given her power of attorney.
Kang Daniel signed an exclusive contract that contained unreasonable details. We request that this agreement is no longer in effect, effective immediately and to renegotiate the terms of the contract by February 28, 2019.
— Proof of Contents Certification
LM Entertainment’s legal counsel stated that the contract was legal, and signed after consultations held between the agency and Kang Daniel. However, they were willing to renegotiate the terms of the contract with him to make him happier.
Both Yoon Jisung and Kang Daniel were signed to the standard contract for pop culture artists on February 2, 2018. The contract was set to go in effect on February 2, 2019, meaning Kang Daniel filed to terminate the contract the day before it was put into effect.
4. Another Proof of Contents Certification is sent to LM Entertainment
It was now March, and still, no progress had been made. Another Proof of Contents Certification was sent to LM Entertainment on March 4, 2019, this time through Yulchon LLC, Kang Daniel’s legal counsel.
Kang Daniel’s side claimed that LM Entertainment did not pay him his ￦50,000,000 KRW ($44,000 USD) in down payment, violating Article 3, Clause 1 of the exclusive contract. They also pointed out how the company was unregistered at the time of signing the contract, violating Article 13, Clause 1.
In response, LM Entertainment stated that they paid Kang Daniel his ￦50,000,000 KRW ($44,000 USD) down payment on April 14, 2018. They sent ￦48,350,000 KRW ($42,585 USD), subtracting the 3.3% withholding tax. They also explained that they registered the company on February 7, 2019. and how management for Yoon Jisung, who signed the same contract, is going smoothly.
5. The real conflict between Kang Daniel and LM Entertainment? Caused by the joint business contract set up by MMO and LM
Kang Daniel had issues with Article 3, Clauses 3 and 4 from the joint business contract signed by MMO Entertainment and LM Entertainment. He pointed out how in the contract, it says that MMO Entertainment does not need his agreement to negotiate his projects.
The agency grants MMO the exclusive negotiating rights for broadcast, film, performance, and other business related events for the artist.
— Article 3, Clause 3
We guarantee that the artist will be provided an explanation and receive consent from the artist.
— Article 3, Clause 4
LM Entertainment immediately refuted these terms, and both Kang Daniel and his mother claimed that they were aware of the issues between LM Entertainment and MMOEntertainment . They also mentioned personal safety was required, and in the end, the terms were revised.
MMO should respect the agency and the artist’s wishes regarding the artist’s personal rights and business. New albums, concerts, or entertainment activities should be prearranged with the agency or Gil Jong Hwa.
— Article 3, Clause 5
In relations to Article 3, Clause 3, MMO grants the agency (LM) the exclusive rights to planning, production, and other business related activities relating to the artist.
— Article 4, Clause 3
6. Showcasing the joint business contract at work
In simple terms, LM Entertainment and MMO Entertainment entered a joint business agreement. LM Entertainment is managing the business side while MMO Entertainment is managing the artist side.
MMO Entertainment negotiates projects such as albums, songs, performances, fan meetings, and CF’s. However, Kang Daniel and LM Entertainment must agree first. LM Entertainment would handle his overall entertainment activities. This means that in the end, LM Entertainment would still be his management company.
MMO Entertainment sent a proposal to CJ E&M about holding a fan meeting for Kang Daniel. However, the conditions set forth by CJ E&M failed to satisfy LM Entertainment. MMO Entertainment respected LM Entertainment’s wishes, and signed a fan meeting agreement with a different agency, “T”, who offered better conditions. This followed Article 3, Clause 5 where MMO Entertainment still has to respect LM Entertainment’s wishes about activities.
So what does MMO Entertainment actually get out of this? One MMO Entertainment official revealed the real intentions of the company.
The joint business agreement is actually a type of investment contract. They invest 1 billion KRW every year, and they see a 10 percent profit. Their goal is to generate revenue and make a profit. The rights to negotiation is just a pretext.
All of the revenue goes to MMO Entertainment. MMO takes 10%, and 90% goes to LM Entertainment. Of this 90%, LM takes 40% and both Kang Daniel and Yoon Jisung get 50%. So it is a 1:4:5 split.”
— MMO official
7. Kang Daniel: “I didn’t know” vs LM Entertainment “He’s pretending not to know”
In reality, MMO Entertainment’s role in negotiating terms is not very big. MMO Entertainment has to always keep in mind that LM Entertainment can veto what they plan. Kang Daniel’s side is also well aware of how effective the right to negotiations is.
The problem is the term of “prior consent”. Kang Daniel claims that he was not consulted with before the writing of his contract with LM Entertainment. It magnified the problem of loss of trust. On the other hand, LM Entertainment says that Kang Daniel is pretending not to know about that term. He was working with MMO Entertainment during preparations of a new album in July of 2018, and Dispatch has revealed a conversation from then.
Kang Daniel: Where is the album production team from?
LM: They’re from CJ.
Kang Daniel: CJ production team? Ah, are you bringing them to our company?
LM: It’s just temporary.
Kang Daniel: I should meet them as soon as possible. Right now I think the A&R team is the most important. I have a lot of people around me that can help in producing an album.
One LM Entertainment representative also shared their comments.
There was a place saved for him in MMO after Wanna One’s end. They also paid for his lawsuit against malicious commenters. We also held meetings about his solo album. In reality, he said he had no choice but to get investment from CJ. But instead…
— LM Entertainment official
8. Kang Daniel gets involved with Kush, plans on his solo album move further
The LM Entertainment official continued, relaying what happened during the meetings about the production of Kang Daniel’s solo album.
Instead, I respected his intentions more than anything. He even accepted the opinion of having Kush produce his album
— LM Entertainment official
Dispatch revealed a set of messages from December 2018 between Kang Daniel and Gil Jong Hwa, showing that they wanted to meet up with Kush.
Kang Daniel: Gil hyung! What do you think about meeting up with Kush on January 5 or 6?
Gil Jong Hwa: Lets do it on the 6th
Kang Daniel: ㅋㅋ Okay okay. I’m excited. Kush told me something that gave me a lot of confidence.
Gil Jong Hwa: That’s why. Let’s go check it out~
There seemed to be no problems in December 2018. There weren’t even any problems with Gil Jong Hwa until January 31, 2019. Dispatch released another set of messages between the two.
Kang Daniel: Producer-nim, Ms. Seol’s opinion is also my opinion.
Gil Jong Hwa: Understood.
Kang Daniel: Thanks
Gil Jong Hwa: What thanks ^^ I’ll see you in a bit.
9. And finally, introducing Chairman Won
In reality, there were signs of a possible dispute looming since January 23, 2019 when Ms. Seol got in contact with an LM Entertainment director, and mentioned Chairman Won. Chairman Won is an M&A (mergers and acquisitions) expert, and has used celebrities as a sort of “stock’ to obtain massive wealth. He was involved in the listing of YG Entertainment on KOSDAQ as well as the acquisition of YG+. He has made over 10 billion KRW from YG+ alone.
Ms. Seol: Please consult with Gil Jong Hwa and let me know
LM Director: Sure ^^
Ms. Seol: It’s convenient to work with management who gives money unconditionally. That’s why I spend Chairman Won’s money. Usually he doesn’t invest much in new companies. But right now I am the collateral ㅎㅎ.
Chairman Won has denied any knowledge about Kang Daniel, saying he doesn’t even know him.
I don’t even know who Kang Daniel is. I don’t think I will invest in the entertainment industry again. I hope the situation will be resolved well.
— Chairman Won
Kang Daniel’s legal counsel has stated that they would not be providing a statement in response to Dispatch’s report, and that everything will be revealed in court on April 5 during the interrogations.
Fans are not believing LM Entertainment’s claims, as they have consistently been changing their stance on the entire situation. In addition, it was revealed that Kang Daniel was with fellow member Hwang Minhyun on the date he was reportedly seen with Ms. Seol.