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SM Entertainment’s CEO Lee Soo Man has been named in the Pandora Papers for establishing eight paper companies in Hong Kong for tax evasion and money laundering.
Home to some of the biggest K-pop bands such as NCT, Red Velvet, SNSD, SHINee, aespa, and more, the agency’s founder’s allegations come as a shock for many. Korean media outlet Newstapa participated in the Pandora Papers leaks investigation held worldwide.
Pandora Papers leak has SM Entertainment founder Lee Soo Man’s name for tax evasion
As per BBC News, the Pandora Papers leaks were part of a joint investigation by multiple global media partners. They now have nearly 12 million documents proving money laundering, slush funds, corruption, and tax evasion of the wealthiest leaders.
Among them is K-pop agency behemoth SM Entertainment’s founder, Lee Soo Man, as reported by Newstapa. According to them, Lee Soo Man set up eight paper companies in Hong Kong, with five under borrowed names to hide his wealth, proof of which is in their detailed report.
Newstapa named the five companies, Success Maker Investment Limited, Polex Development Limited, Sky Creative Development Limited, Pacific Leading Development, JG Christian Charity Foundation, and revealed that Lee Soo Man is indirectly connected. His name isn’t mentioned in the shareholder’s list but internal documents.
Ilshin Accounting Corporation had an application for a borrowed-name service to establish and manage Success Maker by Lee Soo Man. They argue that Lee Soo Man is the beneficial owner of the corporations.
SM Entertainment releases a statement denying Pandora Paper leaks allegations
The agency issued a statement clarifying and denying the tax evasion charges against Lee Soo Man on the same day.
According to The Korea Times, the agency informed that the Hong Kong-based companies were established by Lee Soo Man’s father and are not slush funds.
“Hong Kong-based companies that Newstapa claims SM Entertainment founder and chief producer Lee Soo-man created with slush funds were established by Lee's father, James Hee-jae Lee, an immigrant to America, with his own assets.”
They also noted that they had shared all the required documents with Newstapa.
The statement also clarifies that the property was inherited by Lee Soo Man’s mother, Grace Kyong-hyon Lee. She ultimately donated the money to JG Christian Charity Foundation, as per Lee Hee Jae’s will.
They reiterated that the claims are false and that both the agency and the CEO have not partaken in any illegal activities.
“All of the suspicions that Newstapa raised have been cleared in investigations by the National Tax Service in 2014 and 2020 and the Financial Supervisory Service in 2014. They all have concluded that SM Entertainment and Lee Soo-man were not involved in illegal activities then.”
However, Newstapa has fired back in their article stating it’s difficult to envision a 90-year-old Lee Hee Jae’s wife establishing Sky Creative Development Limited and Pacific Leading Development in 2010 for business purposes.
Another document from Newstapa reveals that Lee Soo Man owes five million out of seven million shares of Sky Creative Development, further deepening suspicions.
Meanwhile, SM Entertainment has stated they’re suing Newstapa for defamation.
