EXO’s Baekhyun, Chen, and Xiumin have shared another statement through their legal representative.
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Following their initial statement announcing termination of their contracts with SM Entertainment, EXO’s Baekhyun, Xiumin, and Chen released a statement via their legal representative of the law firm LIN refuting SM Entertainment’s statement from June 1.
On June 5, the legal representative of the three members announced that they had filed a complaint to the Fair Trade Commission on June 4 against SM Entertainment and the agency responded with their decision in a separate statement.
In response, Baekhyun, Chen, and Xiumin’s legal representative released a detailed statement later this day to refute the agency’s latest claims.
Read the full statement below:
This is lawyer Lee Jae Hak of the law firm LIN, representing EXO members Baekhyun, Xiumin, and Chen (Byun Baek Hyun, Kim Min Seok, Kim Jong Dae, hereafter “artists”).
On behalf of our client, we filed a complaint to the Fair Trade Commission (hereafter “FTC”) on June 4, 2023 against SM Entertainment (hereafter “SM”) for “abuse of superior bargaining position.” Regarding this, SM shared an official press release on June 5.
With regards to this, we will refute each claim, case by case. In addition, the members would like to tell fans in detail about what has been happening.
1. As [former EXO member] Tao is the case of a Chinese trainee, it was a different situation from the start, so it is not valid to claim that the previous judgement by the FTC, the corrective orders issued twice against SM, and our report are incorrect because of that case.
Citing the court ruling regarding Tao, SM is claiming that the terms of their artist contracts were already recognized as fair in 2018. However, this is different from the truth.
First, as Tao is Chinese, he was a trainee who was expected to promote overseas ever since he signed his exclusive contract. Unlike this, Baekhyun, Xiumin, and Chen are all Korean so when they signed their exclusive contracts, they were trainees whose overseas promotions were not decided. However, at the time of the exclusive contract signing for these three artists whose overseas promotions were not yet decided, SM indiscriminately made them sign an annex agreement that extended the exclusive contract period by three years on the grounds of overseas expansion.
Especially in the case of Baekhyun, after the above exclusive contract, he was assigned as a member of EXO-K (“K” being an abbreviation for “Korea”) and promoted in EXO’s domestic unit in Korea, so it’s unfair that he was forced to sign an annex agreement for a three-year extension because of overseas promotions. Also, in the case of Xiumin and Chen, their Korean and overseas promotions were not decided at the time of their exclusive contract signing, but the annex agreements for a three-year extension were first completed indiscriminately and they were assigned to promote in China after signing the exclusive contract, so the unfair act of first extending a contract by three years for trainees whose overseas promotions have not even been decided still exists.
As already pointed out, on January 13, 2011, SM was ordered to take corrective action according to the FTC resolution No. 2011-002, “While signing exclusive contracts with trainees aspiring to be celebrities, the examinee (SM) used their trading position and indiscriminately applied an extended contract period to all trainees, without considering the individual circumstances of each trainee, stating overseas expansion as a reason even when that was not confirmed at the time of signing, and must not repeat the act of disadvantaging the trainees, who are the counterparties of the trade.”
Despite that, SM is indiscriminately extending the three-year exclusive period through annex agreements. It is clear that this is an illegal act that directly opposes the corrective order of the FTC.
While making the exclusive contracts start from the debut date, SM is signing exclusive contracts ahead of time with trainees, but when it is not decided when one will debut, what kind of group they will promote as, or whether they will promote overseas at the time of signing, it is not allowed to indiscriminately extend [contracts] for three years through an annex agreement.
Our artists figure that even now, when SM signs contracts with trainees, they are indiscriminately using annex agreements to add three years [to contracts] on the grounds of overseas promotions. As this fails to comply with the corrective measures of Article 49, Paragraph 1 under Article 125, Paragraph 1 of the Monopoly Regulation and Fair Trade Act, this is a criminal act that must receive a punishment of imprisonment for up to two years or a fine of up to 150 million won [approximately $115,100].
The continued rationalization of SM, who has kept up unfair contracts without correction even after receiving corrective orders twice, is just embarrassing. This is the reason why the FTC must investigate the exclusive contracts SM has signed with their trainees and artists.
2. Unlike SM’s press release, our lawyer and artists have yet to receive settlement reports.
Today (June 5) at 8 a.m. (KST), SM shared a press release stating that they will provide copies of settlement reports, and in accordance, our legal representative shared the artists’ signed copy of a confidentiality agreement to SM.
However, even by the current time of 6 p.m. (KST) today when work hours are over, SM has not provided any settlement reports stating “the settlement reports are not ready yet.”
3. To EXO’s fans who are likely spending their days nervously due to our worrying and not happy news, Baekhyun, Xiumin, and Chen want to explain past situations in detail.
3-A. Consistent appeasement and atmosphere setting
We, who signed exclusive contracts with SM in June 2010 and May 2011 respectively, received contract renewals from SM around December of last year about a year before our 12th and 13th years, extending our existing contracts by five years for a total of 17-18 years.
Our members appointed a lawyer for review in the process of contract renewals and at that time too, the contract was unjust so we requested coordination eight times, but SM did not accept. We only saw SM’s firm determination to not change anything in the contract. Ultimately, barely anything we requested was reflected [in the contract].
Although we thought it was unfair, the reason we had no choice but to seal [the contract] was because there was consistent appeasement and the creation of an atmosphere that was hard to turn down. We’ve been told that if an individual does not renew their contract, the remaining members or the entire team could be at a disadvantage.
At the time, SM said that they wished everyone was in agreement regarding the decision of the members’ contract renewal but also said to Baekhyun, “Baekhyun, you have to sign so that the other members can receive this amount of a contract deposit,” pressuring him and requesting his renewal. As this was before the renewal was activated, they also stated that the contract could be canceled at any time. At the time, Baekhyun was in the middle of his military service.
Amidst SM’s contradictory attitude and the contract expirations that differed for each member, in order to maintain EXO’s smooth promotions, Baekhyun had no choice but to sign the contract renewal with an intimidated and resigned heart even with a year remaining on his exclusive contract.
Although we requested coordination eight times [for the renewal contract], it was a process where even using the word “coordination” was embarrassing and it was a renewal contract that did not reflect the requests at all. Despite that, the only reasons we signed the renewal contract were to stay loyal to our EXO members and protect EXO. To be honest, it’s true that we signed basically giving up on the contents of the contract.
What happened when we were helpless was to the point where we thought that the long-running, closed-off group atmosphere unique to SM was similar to “gaslighting,” which has been filling up the media these days.
3-B. Unfair processes that go beyond unfair content
The contract process, and not just the content, were unfair.
At the time, despite the contract needing to be delivered right after it was signed, SM took back the contract and it was not delivered to us. After a few days and at our request, the contracts were delivered to us.
Furthermore, due to the statement that the contract deposit is paid one year after the date of signing, our members have not yet received the full contract deposit.
It’s also strange that our contract renewals were rushed and carried out suddenly around a year before the contract renewal period.
After completing contracts with us in a flash, various news arose regarding a takeover battle surrounding SM. We couldn’t help but question, “Ah, is that why our contracts with nearly a year left were moved up and signed?”
At the same time, we couldn’t help but ask ourselves countless times whether signing this questionable contract was really an act to protect EXO and EXO’s members, and the conclusion at the end of these questions was “Let’s try, even if just once, for the sake of those precious [to us].”
3-C. No explanation of significant changes in the company
In the situation of the agency being passed on, SM did not give us artists any kind of understanding, comments, or explanations. As if we were outsiders of the agency, we had to figure out what kind of situation the company was in through news reports. We couldn’t help but be dazed.
What we felt during the acquisition process was that the agency did not care about us at all. We even had the sad thoughts that we were merely accessories and subjects that had to comply with what the agency said no matter what.
3-D. Revenue infringement which artists have been dealing with for decades
When issues such as Like Planning were noisily filling the media, it was described as if only the interests of SM as a company and its shareholders had been infringed upon for a long time, but nobody paid attention to the fact that the interests of us artists and staff, who carry out profitable activities with SM, were also greatly infringed.
We can easily make a guess that over the past 12-13 years, of the revenue written on our statement of accounts, a significant amount of profits were taken out in unreasonable and incomprehensible ways, whether under the guise of producer fees, royalties, or whatever other reason.
Before SM states “From now on, there won’t be situations like that of the past,” we think there must be a process where they clearly recognize what the past was really like and explain to us artists, fans, the public, and shareholders. We believe that from there, a new start will be possible.
When the company was in a state of disorder, it was their artists who were even more disorderly. While everyone had doubts, it was us who could not step forward.
3-E. Seven requests to share settlement reports
We never imagined that getting settlement reports from our agency would be this difficult.
Receiving settlement reports is a basic right of artists. Despite being with them for over 10 years and working diligently, can we not even enjoy this kind of basic right? We were so disappointed. And our doubts grew even greater.
We didn’t know that the agency would deem getting help from an accountant or lawyer and looking over the numbers as something so wrong in their statement.
Nobody resolved this for us. Although we are afraid, we’ve mustered up the courage to take one step forward out of our desire to learn the truth.
As it clearly states “provision of data” in the contract, how are we supposed to understand the shamelessness that claims this only means “right to read”? Did SM really think that the FTC and court would accept their poor argument that the “provision of data” in the contract was merely the “right to read”?
We believe that at the minimum, settlement reports should not be confidential to us, who are the parties involved. All the experts we consulted unanimously said that “provide” and “right to read” have clear differences.
Only a few media and YouTubers who are close with SM agree with the claim that it’s merely a “right to read.” Are they claiming that the FTC and judicial authorities will accept SM’s narrow-minded claim that it’s only a “right to read”?
3-F. A word to EXO’s fans
If someone has been taking advantage of the memories, love, youth, efforts, and passion shared between the members and fans over the past 11 years, we believe that must be corrected. More than anyone else, we hope they were fair, but if they were not, we believe it needs to be fixed.
If the “SM Community” is forcing artists to tolerate the injustices of the past, we think we need to speak out against that coercion.
More than anything, we value our EXO members. Half our lives have been spent sharing joys and sorrows with our members. We would never betray these members and will prioritize EXO in any situation.
We will leave it up to the public and our precious fans to decide whether us having the courage to speak up about our rights is an act that betrays our EXO members.
Above all, we are not afraid of anything as long as we have our fans.