In what has probably tellingly flown a bit under the radar, SM Entertainment founder Lee Soo Man was recently named in the Pandora Papers. Published by the International Consortium Of Investigative Journalists (ICIJ), the Pandora Papers are a leak of ~12 million documents containing financial data, and South Korea based org Newstapa has reported that Lee Soo Man was hiding portions of his wealth in multiple shell companies setup in Hong Kong for the purpose of tax evasion.
Among the eight firms based in Hong Kong and found to be connected to Lee Soo-man and S.M. Entertainment, five, including Success Maker Investment and JG Christian Charity Foundation, used a nominee service to hide the source of funds. The S.M. founder, however, is named as a beneficial owner in many of these firms, according to internal documents obtained by Newstapa. Lee was mentioned 399 times across 280 documents among the cache that includes 11.9 million files exposing secret offshore affairs of world leaders and the elite.
SME released a statement denying the allegations and saying they intend to sue the outlet.
S.M. Entertainment, home to some of the most successful K-pop acts, has denied all allegations and threatened to take legal action against the media outlet and reporters. “The Hong Kong companies, which the reporting implied to have been established and operated with Lee’s offshore concealed assets, were founded by James Heejae Lee’s assets in Korea, the father of chief producer Lee Soo-man,” S.M. Entertainment said in a statement. Lee’s father’s assets in Hong Kong were first inherited by his wife Grace Kyonghyon Lee. They were eventually donated to JG Christian Charity Foundation upon his will under his wife’s name, the company explained. “We express regret over the report that the Hong Kong-based companies were established illegally, unlawfully or in a way that evades the law in order to purchase overseas property and that chief producer Lee Soo-man was behind all of this,” the statement read.
In February of this year, SM Entertainment was ordered to pay ~$18 million after a special tax investigation, which is far from the company’s first time being investigated. While Lee Soo Man himself is no stranger to being questioned over financial behavior, both lately and in the past when he was wanted by Interpol.