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Lee Soo Man wants to return to the industry and asks HYBE to waive the “Non-Compete Clause” in the contract for selling SM Entertainment shares

Lee Soo Man wants to return to the industry and asks HYBE to waive the "Non-Compete Clause" in the contract for selling SM Entertainment shares

There is a dispute between former SM Entertainment executive producerLee Soo Man and HYBE over the “Non-Compete clause” in the contract for selling shares in SM Entertainment earlier this year. This clause prevents the person who sold the shares from starting a similar competitive business for a certain period of time. Lee has requested that the clause be lifted, but Hybe is resisting

In February, Lee Soo Man sold his 14.8% stake in SM Entertainment to HYBE for 430 billion KRW (326.5 million USD) at a price of 120,000 KRW (91 USD) per share. Experts believe that Lee Soo Man has been preparing to re-enter the entertainment industry while attempting to hold HYPE responsible for failing to secure the management rights of SM Entertainment. Lee Soo Man’s decision to sell to HYBE was a response to Kakao’s takeover attempt earlier this year, in collaboration with the SM Entertainment board, to force him out of the company.

When HYBE purchased Lee Soo Man’s shares, they took over the management rights of SM Entertainment, and Lee Soo Man announced a joint statement with HYBE Chairman Bang Si Hyuk. However, in March, HYBE abruptly signed an agreement with Kakao and withdrew from the battle for the management rights of SM Entertainment. HYBE even participated in Kakao’s tender offer of SM Entertainment and made a profit by selling some of the shares acquired from Lee Soo Man.

 

Lee Soo Man was reportedly angry with HYBE’s “betrayal” and has asked them to lift the non-compete clause. However, HYBE has stated that the issue of their withdrawal from the acquisition of SM Entertainment has nothing to do with the contract with Lee Soo Man and has no legal obligation to lift the clause.

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