Just days after Kakao Corp officially became SM Entertainment’s largest shareholder, SM announced a management shakeup, promoting Chief Financial Officer Jang Cheol-hyuk as its new Chief Executive Officer.
Jang succeeds outgoing CEO Lee Sung-soo. He was appointed during the company’s meeting on Friday (March 31), where the company also named new directors who were recommended by Kakao.
The new CEO does not hold any shares in the company, according to a stock exchange filing on Friday.
Jang joined SM in February 2022. Prior to joining SM, he held CFO roles at South Korean skincare and cosmetics manufacturer Skin Food and at shipping company, Donga Tanker, the filing showed.
The change follows a months-long saga that came to a close last week when Kakao won in its bid to acquire a substantial stake in SM that prevented rival HYBE, the agency behind BTS, to take control of SM Entertainment.
Former CEO Lee Sung-soo had disclosed his plan to step down as CEO and from the company’s board as a director over a month ago. Lee started working at SM as a part-timer, monitoring fans’ comments and activities on the internet, according to Allkpop.
He later joined SM’s A&R branch, collecting demos for what would become South Korean boy band Shinee’s debut album, the local newswire added.
Lee was among SM’s executives that opposed what they described as a “hostile takeover” by HYBE, and slammed his uncle Lee Soo-man’s “wrongful ways,” according to a separate Allkpop report.
Meanwhile, SM’s board appointed five new directors, four of which are outside directors.
The new directors are Kim Kyu-sik, Taehee Kim, Moon Keongbin, Lee Seungmin and Sung-moon Cho. The appointments took effect March 31, and their term of office will run for three years, according to a stock exchange filing.
Lee Soo-man, who still held a 3.8% stake in the company, did not attend the general meeting on Friday, according to local media.
However, SM’s founder addressed the change at SM, saying in a press release to local media that “the curtains have closed down on one of many eras today at SM Entertainment, a company founded with my name as its initials.”
“The point at which music becomes one with the world must be the point where music meets technology, and the goal of this is fundamentally music’s contribution to creating a sustainable world. The reason I was able to come to such a decision as I sold my shares to chairman Bang Si Hyuk of HYBE was also because I knew that we shared the same vision when it came to advancing music toward a sustainable world,” Lee Soo-man was quoted by Allkpop as saying.
Hyundai Motor Securities analyst Kim Hyun-yong said retaining a stake in SM could allow HYBE to ‘contain’ Kakao in the long run, Reuters reported last week.
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