SM Entertainment has released a video of its CFO Jang Cheol-hyuk explaining company leadership’s opposition to HYBE’s recent acquisition of a controlling stake in the K-pop agency.On February 20, a video titled “The reason why SM is against HYBE’s hostile takeover” was published on the agency’s official SMTOWN YouTube account, which usually only releases content for its artists.
In the clip, Jang directly addressed fans of SM’s artists and its shareholders, outlining the agency’s view on HYBE’s recent acquisition and what it sees as potential consequences of the merger.In the video, Jang claimed that HYBE did not request due diligence material from SM Entertainment during the merger and acquisition disclosure process despite the large scale of the deal – a 1trillion won investment on HYBE’s part, which would require the agency to take a short-term loan in order to finance it, according to HYBE’s regulatory filing on February 10.Jang then raised this as an indication that HYBE’s corporate governance is “far from sound or rational”, claiming that SM Entertainment would “inevitably” be subject to this “weak governance” should HYBE take over the company, to the detriment of SM’s shareholders and artists.Jang also claimed that the values and interests of SM’s shareholders would likely not be prioritised in the event that HYBE successfully dominates its board of directors, and alleged that a takeover by HYBE would lead to the de-prioritisation of SM artists and their music releases due to HYBE’s roster already being “saturated” with artists from its existing subsidiaries.
Read more on nme.com
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