The Writing Is On The Wall
SM Entertainment has appointed its first auditor from outside the influence of former chairman Lee Soo Man.
Previously, Align Partners Capital Management, a minor shareholder in SM Entertainment, proposed Kwak Jun Ho for nomination as chief auditor. Kwak Jun Ho is a business/finance professional who has worked for a variety of companies including 'GS Homeshopping', 'SK Hynix', and 'KCF Technologies'. According to Align Partners Capital Management, SM Entertainment has hired auditors with strong links to the company's main body since its initial public offering in 2000, resulting in "incomplete" and "ambiguous" financial reports on the company's financial activities.
Additionally, the conflict over the appointment of a new auditor heightened tensions among SM Entertainment's shareholders in the run-up to the general meeting, as speculations claimed that SM's financial activities in the past favored higher pay for producer Lee Soo Man, thereby detracting from the company's overall market value.
SM Entertainment has made an official statement in reaction to the current disclosures, confirming the hiring of auditor Kwak Jun Ho commencing in 2022.
Additionally, Lee Sung Soo, CEO of SM Entertainment, stated, "We will view the outcomes of this general meeting as a watershed moment in our efforts to strengthen our connections with our shareholders. We want to thoroughly analyze the numerous shareholder requests and to demonstrate growth and development in the near future."