It is not difficult to make Lee Soo Man surrender. After all, Lee Soo Man has been in charge of SM Entertainment for 23 years and embezzled 744.3 billion won from the company's account, which is a huge sum of 3.9 billion yuan.
SM Entertainment had planned to go public on KOSDAQ since 1999. At that time, the listing conditions required that the company's registered capital must exceed 1 billion won, while SM Entertainment's registered capital was only 50 million won.
Therefore, SM Entertainment needed to increase its capital and needed money, so it implemented a paid capital increase of 1.15 billion won. Lee Soo Man could not come up with the money, so he withdrew 900 million won and 250 million won from two companies of SM Entertainment respectively to complete the capital increase.
To sum it up simply, it was a false capital injection. Lee Soo Man took money out of SM Entertainment's company account and then reinvested it into SM Entertainment.
A company increases its capital in the hope of attracting external funds to the company. False capital injection, taking the company's money out and reinvesting it in the company, is actually financial fraud, which is a serious crime.
SM Entertainment was successfully listed in April 2000. In March 2000, Lee Soo-man and his parents held a total of 66.99% of SM Entertainment shares.
In April 2000, SM Entertainment issued shares at 12,000 won per share. In June 2000, SM Entertainment's market value was 180 billion won. Lee Soo Man held 53.59% of the shares, corresponding to a stock market value of 96 billion won.
Lee Soo Man completed the most basic payment for the purpose of listing. He did not convene a board of directors, and everything was done by Lee Soo Man's instructions. The Korean prosecutors have not yet investigated Lee Soo Man, and it is estimated that Lee Soo Man has not yet returned the embezzled 1.15 billion won to SM Entertainment's company account.
Zhong Xiaotong resigned as the President of South Korea in 2002. In January 2003, Lee Soo-man was wanted by Interpol for embezzlement of funds. In May 2003, Lee Soo-man was investigated by the Seoul District Prosecutor's Office and was eventually sentenced to two years in prison and three years of probation.
If Song Yi used this handle to threaten Lee Soo Man, Lee Soo Man would definitely give in. However, there was no need to throw out this trump card so early.
Currently, SM Entertainment's total market value is around 160 billion won, and its stock price is low. After all, TVXQ and Boa have not yet become popular in the Japanese market.
Shinya Capital Fund can buy some SM Entertainment shares, which is also a good long-term investment. In 2014, SM Entertainment's market value exceeded 2 trillion won, entering the top 10 of KOSDAQ market value for the first time.
Song Yi was a little jealous, he only needed 60 to 70 billion won to replace Lee Soo Man as the largest shareholder of SM Entertainment. But he knew that Lee Soo Man was not so stupid as to watch SM Entertainment fall into the hands of others.
SM Entertainment is Lee Soo Man's cash cow, so how could he let go so easily? When SM Entertainment went public, the company's brochure stated:
"Like Planning is responsible for music consultation and production for its singers. It will pay 15% of the record sales as a handling fee." This Like Planning is Lee Soo-man's personal company.
Lee Soo Man is the chief producer of SM Entertainment, and Lee Soo Man has received a high salary from SM Entertainment. This means that Lee Soo Man is receiving double pay from SM Entertainment.
In 2000, SM Entertainment paid 2.1 billion won in labor fees to Like Planning, and SM Entertainment Films' profit was 1.846 billion won that year. In the following 22 years, SM Entertainment paid a total of 174.3 billion won in labor fees to Like Planning.
Look at how Lee Soo Man's financial skills are much better than JYP's Park Jin Young and YG Entertainment's Yang Hyun Seok. YG Entertainment went public in 2011 and JYP Entertainment went public in 2013. There has never been the so-called three major entertainment companies. YG Entertainment and JYP Entertainment have always been younger brothers in front of SM Entertainment.
If Hybe Entertainment hadn't been lucky enough to pick up BTS, SM Entertainment would have been the only entertainment company. However, Hybe Entertainment's market value of 5 trillion won is probably unprecedented and will never be surpassed, after all, the Korean entertainment market is so small.
The predecessor of Hybe Entertainment was Big Hit Entertainment founded by Fang Zhihe in 2005. The company had been tepid until the debut of BTS in 2013, when the company took off.
In addition to SM Entertainment, New Asia Capital Fund can also make financial investments in YG Entertainment and JYP Entertainment. Sooner or later, New Asia Media will set up its own wireless TV station, and when it does, it will have to produce variety shows, so it is not a good idea to have good relationships with major entertainment companies in advance.
"Chairman Song, what do you think of my plan?" Lee Soo Man's question brought Song Yi, who was daydreaming, back to the meeting room.
Song Yi was stunned for a moment. He didn't even listen to the plan. He said calmly, "President Li has considered everything very carefully, but we can still improve it a little bit."
Jin Xiyuan, who was sitting below Song Yi, almost laughed out loud. She knew the man next to her too well. Song Yi definitely didn't take Lee Soo Man seriously, so he used the strategy of procrastination.
Song Yi often does this when listening to Xinya employees' work reports. When the employees hear Song Yi say this, they often think that Song Yi is not very satisfied with their plans, so they rack their brains to improve them.
Lee Soo Man took the initiative to ask, "President Song is not optimistic about this 12-member girl group project?"
Song Yi understood now that Lee Soo Man was going to create a large girl group similar to Super Junior. SES was a three-member group, Fin.KL was a four-member group, and Lee Soo Man was actually planning to launch a 12-member girl group, which was simply the Korean version of the 12 Girls Band.
In fact, the team of Girls' Generation has been changing all the time, and many trainees have been changing. Since 2005, the 12-member lineup of Girls' Generation is: Lee Yeon-hee, Hong Bora, Bae Seok-bin, Zhang Liyin, Jessica Jung, Kim Hyo-yeon, Kwon Yuri, Choi Soo-young, Im Yoona, Seo Ju-hyun, Kim Ye-jin and Park So-yeon.
SM Entertainment wanted to debut Kim Taeyeon as a solo singer at that time, and Sunny had not yet joined SM Entertainment. Lee Yeon Hee later debuted as an actress, and Park So Yeon left SM Entertainment and debuted with Tara.
Song Yi looked at the screen and said, "Councilor Jin, could you please show me the female trainees you like again?" The screen showed the profiles of Lee Yeon Hee, Kwon Yuri, Jessica Jung, Kim Hyoyeon and Choi Sooyoung.
Song Yi pointed at Li Yanxi again, "President Li, please introduce this trainee to me."
Lee Soo Man didn't know what Song Yi meant. Could it be that New Asia Media had taken a fancy to Lee Yeon Hee? "Lee Yeon Hee was born in Seoul on February 26, 1988. She participated in the SM Best Youth Selection in 2001 and won the Best Appearance Award and the Best Award. She is currently receiving singing training in the company." Lee Soo Man said.
Song Yi pondered for a moment. Li Yanxi is already thirteen years old this year. Song Yi asked, "How tall is Li Yanxi now?"
Lee Soo Man was stuck for a moment and looked at Kim Young Min. "162 cm." Kim Young Min helped answer.
"Have you measured your bone age? What is her maximum height according to the doctors?" Song Yi continued to ask. Entertainment companies usually take trainees to test their bone age to predict their height before signing them. Koreans are obsessed with looks, so female idols with height and long legs have an advantage.
Kim Young-min is obviously very concerned about Lee Yeon-hee, "The doctor said Lee Yeon-hee's future height should be around 172 cm."
Song Yi nodded. "In my opinion, a girl group of 12 is too many people. Even fans will have a hard time remembering every member's name. I suggest that the group should be kept at 8 to 9 people, and their heights should be kept between 1.6 and 1.7 meters. This is actually more conducive to choreography."
"Lee Yeon Hee has such outstanding looks and an advantage in height. It's a pity that she debuted simply as an idol. In fact, she can consider developing into an actress." Song Yi expressed his opinion.
Lee Soo Man immediately became interested. "President Song, do you think highly of Yeon Hee? I actually want SM Entertainment's artists to develop into actors, but SM Entertainment's artists who audition for TV dramas often fail to make it to the final round of auditions."
"Actually, I think we can strengthen cooperation between Xinya and SM Entertainment," Song Yi suggested.
Lee Soo Man narrowed his eyes. While observing Song Yi's expression, he guessed Song Yi's true intention.
He pretended to be very interested, "I wonder what cooperation President Song is talking about?"
Song Yi sat back and said, "In fact, there is still a lot of room for cooperation between our Xinya and SM Entertainment, such as inshcool. In fact, SM Entertainment can open an official homepage on the inschool website and publish some official updates, such as Boa's schedule, what variety shows Kangta has recorded, the time and location of the SM family concert, etc."
Nam So Young heard a key word, "SM Family Concert?"
Song Yi paused for a moment, "You SM Entertainment, haven't you launched the SM Family Concert yet?"
"KangTa and Boa's popularity is not enough to support a large-scale concert, so wouldn't it be possible to solve SM Entertainment's current problem of lack of groups by gathering all the singers under SM Entertainment to hold a compilation concert?"
"Of course, we can give this compilation concert a high-sounding name, called SM Town World Tour Concert. SM Entertainment can cooperate with the three major TV stations to broadcast the grand concert live. In addition to increasing the company's ticket revenue, it can also attract more people to pay attention to SM Entertainment and attract more young artists to join SM Entertainment." Song Yi suggested.
HOT has disbanded, leaving only KangTa and Kangta. SES will not renew their contract after it expires at the end of the year, so the SM Town World Tour that Song Yi mentioned is indeed necessary. As for the TV station, SM Entertainment and MBC TV have always had a good relationship.
"Chairman Song is right. We, SM Entertainment, should indeed open an official homepage on inshcool. People like KangTa and Boa can also open homepages on inschool," said Lee Soo-man.
Kim Hee-won happened to interject at this time, "In fact, not only KangTa and Boa, but also CEO Lee, CEO Kim, and CEO Nam can open a homepage on inshcool."
"In addition to promoting the new album and concert, you can also clarify some negative news on inshcool. For example, wasn't KangTa reported to be at odds with the other two members of HOT before the New Year? You can upload a photo of the three members of HOT having a dinner together during the Spring Festival to refute this rumor." Kim Hee-won said.
When Lee Soo Man heard what Kim Hee Won said, he now realized the importance of inschool. In the future, inshcool can even replace the three major TV stations and the three major newspapers and become the most important channel for public opinion propaganda.
"I wonder how many users inschool has now?" Lee Soo Man couldn't help but ask.
Jin Xiyuan looked pleased. "Since Xinya Network does not need external financing, we rarely announce the specific number of users. But since President Li asked, I might as well tell you the truth. At present, the number of registered users of Inschool has exceeded 8 million, accounting for about one-sixth of the population of South Korea. In two months at most, the number of Inshcool users will exceed 10 million."
Inshcool's Valentine's Day advertisement was obviously very successful. Korean office workers registered for Inshcool one after another. According to the survey, more than 50.5% of young people aged 19 to 30 have registered for Inshcool accounts. Among people aged 30 to 40, 34.4% have registered for Inshcool. This is a very high proportion.
When Lee Soo Man heard what Kim Hee Won said, he couldn't help but sigh at the rapid development of inschool. In less than a year, inshcool already had 8 million users. In fact, the user group of inshcool and the consumer group of SM Entertainment are highly overlapped.
If SM Entertainment can make use of the inshcool platform, it may be able to sell more albums, achieve higher revenue and profits, and the stock price of SM Entertainment will naturally rise further.
It's a pity that Shin-A Network Co., Ltd. didn't raise funds, otherwise he would like to buy some Shin-A Network stocks. If inshcool goes public in the future, the market value will be at least more than 10 times that of SM Entertainment. However, Lee Soo-man never expected that inshcool's market value in the future would be far more than 100 times that of SM Entertainment.
Song Yi has also recently considered the listing of the New Asia Group, and he plans to split and merge the New Asia Group's companies. The New Asia Network in China and the New Asia Network Co., Ltd. in South Korea will be divested, as will New Asia Investment, Shining Investment Partnership and New Asia Capital Fund in South Korea.
The main body of the backdoor listing plan of the New Asia Group is the media company and the real estate company. The Internet company and the investment company are not included in the listing plan for the time being. The media company and the real estate company alone can support a market value of at least 2 to 3 trillion won.
Lee Soo Man is considering whether to start a new social networking site in cooperation with Naver or Daum. If inshcool rises, the biggest threat will of course be the three major portals Naver, Yahoo Korea and Daum. After all, if all SM Entertainment members move into inshcool, it means that inshcool will firmly grasp SM Entertainment's media resources, and SM Entertainment will be controlled by inshcool. Yahoo Korea has actually noticed inshcool. They tried to acquire inschool for 50 billion won, but Song Yi rejected it without hesitation. Yahoo Korea was unwilling to raise the acquisition price because it could not judge the profit prospects of inschool.
Song Yi remembered that the Red Leader Zhou Hongyi sold the 3721 website to Yahoo for $120 million in 2003, and he became the CEO of Yahoo China. In 2002, 3721's annual sales reached 200 million yuan, with a gross profit of 60 million yuan. Yahoo Korea is now planning to acquire InSchool for less than 300 million yuan. Isn't this an international joke? However, InSchool already has a first-mover advantage, and users are already accustomed to the InSchool website. If Yahoo Korea launches a similar social networking site, it is still unclear whether it can retain users.
Lee Soo Man thought it through. He felt that it would be too time-consuming and laborious to rebuild an inschool in Korea. After all, not everyone has money and connections like Song Yi.
Since he can’t beat Shin-A, Lee Soo-man has to consider making Inschool a natural ally of SM Entertainment.
He said to Song Yi, "In fact, we at SM Entertainment intend to have all members join inshcool, including three boy bands and one girl band that will debut in the future. In fact, our TVXQ that will debut next year can also preheat on the inschool website in advance and make an online debut."
"SM Entertainment's inschool homepage will introduce the five members, Jung Yunho, Kim Jaejoong, Shim Changmin, Kim Junsu and Park Yoochun, one by one. Their personal homepages will be opened one by one on inshcool. We, SM Entertainment, can also broadcast the debut concert of TVXQ on the inschool website for a full live broadcast, allowing inschool users to accompany their beloved idols online as they debut as a group."
"Isn't inshcool's Valentine's Day advertisement 'inschool, with you every day'? If inshcool users accompany the idols they support to grow day by day on the website, and then successfully debut, release albums, and hold concerts. I believe SM Entertainment and inschool can achieve a win-win situation." Lee Soo-man said.
This Lee Soo Man is something. Song Yi thinks that TVXQ's plan to debut in inshcool is worth considering. All members of SM Entertainment have joined inschool, so does Lee Soo Man want to get preferential treatment from inschool, or does he want to invest in inshcool?
Unfortunately, for all entertainment companies in Korea, even the huge CJ Entertainment, inshcool is a unique promotional platform. And inschool can find at least two or three companies like SM Entertainment. In short, SM Entertainment needs inshcool, but inschool may not need SM Entertainment.
"President Li, you might as well just speak your mind." Song Yi said.
"Do you think SM Entertainment and Shin Asia Network Co., Ltd. can exchange shareholdings? SM Entertainment will become a shareholder of inschool, and Shin Asia Network will also become a shareholder of SM Entertainment." Lee Soo Man said cautiously.
Song Yi smiled, "President Li, Xinya Network has not yet gone public, and the company's valuation is actually uncertain. How can we exchange shares? Yahoo Korea offered 50 billion won to acquire inshcool, but I didn't sell it. If I say that the inschool website is worth 10 trillion won, are you willing to exchange shares with me?"
When Lee Soo Man heard this, he thought it was a joke. If Inschool is worth 10 trillion won, then 1% of Inschool shares can buy half of SM Entertainment. What is he after? Song Yi said, "See, this is the difference between me and President Lee. In this way, I am quite interested in the plan that President Lee just proposed for TVXQ to debut on Inshcool."
"Our New Asia Media will produce 2 TV series and 2 movies this year. This year it is 2+2, next year it will be 4+4, and the year after next it will be 4 movies and 8 TV series. Our New Asia Media's contracted artists obviously cannot star in so many film and television dramas. We are also willing to provide SM Entertainment's artists with opportunities to star in film and television dramas. It depends on whether you, President Li, agree to let our New Asia become a shareholder of SM Entertainment." Song Yi said.
When Liu Huiying heard that Song Yi was going to invest in SM Entertainment, she couldn't help but take a deep breath. If Xinya Media becomes the major shareholder of SM Entertainment, then her daughter Xu Zhuxian will become the real daughter of SM Entertainment. See you tomorrow (end of this chapter)
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