HYBE Rejects Lee Soo Man’s Request To Revoke His Entertainment Industry Ban
When Lee Soo Man sold his shares in SM Entertainment to HYBE, he signed a “no competition clause.” This ban on competition clause is a commonly used clause that prohibits those who sell stocks or businesses from doing business in the same industry for a certain period of time.
According to investment banking industry insiders, Lee Soo Man had recently asked HYBE to release him from this clause. He signed the clause in February 2023 when he sold his 14.8% stake in SM Entertainment for ₩430 billion KRW (about $325 million USD) to HYBE. Although HYBE ended up selling its shares to Kakao Entertainment after pulling out of the merger and acquisition, the contract between Lee Soo Man and HYBE still stands valid.
HYBE has denied Lee Soo Man’s request for the release of the clause. It seems that Lee Soo Man wants to make a return to the industry but is unable to.
HYBE has stated that “the withdrawal from the acquisition is a matter that has nothing to do with the contract with Lee Soo Man.” Hence, there is no legal obligation for them to lift the ban. On the other hand, insiders report that Lee Soo Man felt that HYBE’s withdrawal was a stab in the back and hence requested a lift on the ban.