SM Releases Statement In Response To Claims By EXO’s Chen, Baekhyun, And Xiumin Regarding Breach Of Settlement Terms

SM Entertainment has released a lengthy statement in response to the allegations made at today’s press conference held by EXO’s Chen, Baekhyun, and Xiumin’s legal representative.

On June 10, representatives of EXO’s Chen, Baekhyun, and Xiumin held a press conference to detail SM Entertainment’s alleged breach of settlement terms. In response to the press conference, SM Entertainment released the following statement refuting the points made at the press conference:

Hello, this is SM Entertainment.

We express deep regret over the content of today’s press conference held by INB100 regarding Chen, Baekhyun, and Xiumin (hereinafter referred to as EXO-CBX) and the manner in which it was carried out, and we convey our stance as follows:

MC Mong and Cha Ga Won denying tampering & claiming to be a relationship that is more than family

First, we want to clarify that the essence of this entire incident is the unfair inducement (tampering) by MC Mong and Cha Ga Won toward our artists. Since a long time ago, MC Mong and Cha Ga Won have approached several artists who have valid exclusive contracts with us. Subsequently, CBX began to nitpick to invalidate the valid renewal contract they signed. Despite this, we patiently listened to their voices and ultimately accepted CBX’s request to conduct individual activities independently. In other words, although the exclusive contract between us and CBX is still valid, we allowed them to conduct individual activities through their individual business, with CBX personally signing the agreement to pay 10 percent of the revenue from their independent business. We made this agreement even though we were not obligated to amend a valid contract because we did not think it would be fair to the other EXO members who are doing their best for EXO’s promotional activities as well as fans who support EXO if EXO’s group activities were to be disrupted due to continuing legal dispute with CBX.

However, as confirmed today, CBX’s INB100 was not operated independently by CBX. INB100 has already been incorporated as a subsidiary of MC Mong and Cha Ga Won. Although we had already suspected this, the information revealed in today’s press conference confirmed the tampering regarding CBX. When we signed the agreement with CBX last year, we even distributed an external message to protect EXO, saying we wouldn’t raise the issue of tampering between MC Mong and Cha Ga Won with regards to CBX. We are deeply dismayed by today’s press conference. We hope that our genuine feelings for EXO are no longer distorted.

CBX enjoys the rights/benefits as EXO members but ignores promises/obligations

In reality, after signing the agreement through mutual consent, CBX independently signed contracts for music and album distribution through their individual business and engaged in various individual activities such as concerts and starring in broadcasts.

Regarding this, the 10 percent payment of the revenue of the individual business is the standard that was actually implemented through court mediation during the exclusive contract dispute with EXO’s Chinese members, and it is already being applied as a reasonable standard with precedent. The standard derived through court mediation was also applied to CBX’s case, and we want to convey that these rates were mutually discussed and finalized during the actual agreement process.

However, INB100 has since been incorporated as a subsidiary of MC Mong and Cha Ga Won and has now sent us a certification of contents indicating that the agreement need not be upheld. This indicates that they want to enjoy the rights and benefits as EXO members but not fulfill their obligations. CBX continues to repeatedly ignore the legally valid contract.

After receiving INB100’s certification of contents, we took into consideration that EXO members D.O., Chen, and Suho were actively engaged in their solo album releases, concerts, and projects, so we chose not to raise the issue to avoid disrupting their activities. We emphasize that despite all this, CBX is distorting our consideration.

Distorting our multifaceted efforts to protect EXO despite financial losses

The claim by INB100 regarding the distribution commission rate being unfairly handled by us is not true. [The rates] were mentioned to support CBX by helping them negotiate better terms with the distribution company during the dispute with CBX. From the beginning, we do not have the authority to determine the distribution commission rate of other distribution companies. In fact, during the agreement process, CBX asked to include the distribution commission rate as a condition of the agreement, but we deleted the relevant clause after explaining that it could not be included because we did not have the authority to decide, and thus it was excluded from the final agreement.

Furthermore, when it became difficult to adjust the distribution commission rate as CBX wanted despite our efforts, we made other accommodations for them (such as allowing Baekhyun’s solo album, which we had been preparing since early 2023, to be released under his own agency and covering the cancellation fee for Baekhyun’s unilateral cancellation of a Japanese concert). Apart from this, CBX and INB100 signed contracts under favorable conditions with another distribution company in which we are a major shareholder, and consequently their music and album distribution are proceeding smoothly, so they have not suffered any particular losses.

In today’s press conference, CBX’s legal representative Attorney Lee stated that CBX are “adults who can think for themselves and take responsibility for their own decisions, acting independently.” Despite this, we can no longer tolerate their repeated claims of invalidating the renewal contract they signed through one year and six months of negotiations between us and the major law firm they hired.

We will not tolerate CBX’s actions of repeatedly claiming that the exclusive contract and subsequent agreement are invalid to pursue their own interests. While they try to justify their wrongdoings through manipulation of public opinion, we will calmly respond according to the law and principles and hold CBX accountable through the courts.

Thank you.

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