Millions Died for Kpop

One of the more interesting observations of 2023.


The kpop industry is apparently megacorrupt - this is also really amateur hour over at SM Entertainment:

Lee Soo Man thus drew up a plan to increase capital by issuing new stocks. He took approximately 900 million KRW from SM Entertainment's funds, and approximately 250 million KRW from SM Enterprise. This money was used to pay for new stocks, thus "increasing" the capital owned by SM Entertainment with its own funds.

In March of 2000, Lee Soo Man owned 66.99% of SM Entertainment's stocks. His father owned 4%, his mother owned 3.3%. In April of 2000, SM Entertainment made its public offering. By June of 2000, SM Entertainment had a market cap of 180 billion KRW (~ $139 million USD). In just one year, Lee Soo Man took 1.15 billion KRW (~ $888,000 USD) of SM Entertainment's funds and transformed it into about 90 billion KRW (~ $70 million USD).

In January of 2003, Lee Soo Man was listed as a wanted criminal on Interpol. In May of the same year, Lee Soo Man was tried and found guilty of embezzlement, receiving 2 years in prison, deferred by a probationary period of 3 years.

During the trial, the court concluded, "Lee Soo Man embezzled 1.15 billion KRW in his company's funds and used it to acquire stocks. With no evidence of any real capital, Lee Soo Man used fake capital to purchase stocks and pretended as if the company's capital had increased. Due to the seriousness of this crime, the defendant must face punishment." Lee Soo Man's legal representative attempted to defend the producer by claiming that the decision to invest company funds in new stocks was agreed upon by the board of directors, and that Lee Soo Man directly returned the borrowed funds.
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