SM Entertainment CEO airs suspicions that founder Lee Soo-man attempted offshore tax avoidance

nme.com:

SM Entertainment and its founder Lee Soo-man has widened further with the release of a video by the K-pop label’s CEO Chris Lee, in which he accuses Lee Soo-man of greed and airs suspicions that he attempted offshore tax avoidance, among several allegations.Chris Lee, who is also known as Lee Sung-soo and one of two current CEOs at the South Korean label, took to his personal YouTube channel to upload a 30-minute-long announcement regarding the current status of the company on February 16.

The video was labelled the first part of a series of videos explaining why SM decided to sever ties with its founder Lee Soo-man (also Chris Lee’s uncle).In the video, Chris Lee accused Lee Soo-man of pushing SM to make unusual contract arrangements with a company he established overseas in a bid to avoid South Korean taxes.According to Chris Lee, Lee Soo-man had launched a new business in Hong Kong called CT Planning Limited, which Chris Lee claims is an offshore version of Lee Soo-man’s separate Korea-based consulting business, Like Planning.

Like Planning has generated ₩149 billion (£96.1million) in profit from SM Entertainment alone since it launched 22 years ago, Chris Lee claimed.“Normally, it is customary for SM Entertainment to pay Like Planning its 6 per cent fee from the settled amount that SM Entertainment would receive after distributing profits between the labels.

However, Lee Soo-man had ordered that contracts be made with the other labels so that he could take 6 per cent of the revenue before it was distributed,” Chris Lee claimed, as translated by Koreaboo.Lee Soo-man could have done this, Chris Lee continued to allege, to avoid taxation in Korea.