The Korea Herald


Lee Soo-man named in leaked offshore data, S.M. Entertainment denies wrongdoing

Founder of K-pop powerhouse named in Pandora Papers

By Yim Hyun-su

Published : Oct. 4, 2021 - 14:58

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S.M. Entertainment founder Lee Soo-man (S.M. Entertainment) S.M. Entertainment founder Lee Soo-man (S.M. Entertainment)
South Korean entertainment mogul Lee Soo-man, who founded S.M. Entertainment, has been named in a major offshore financial data leak known as the “Pandora Papers.”

Local media outlet Newstapa, which is part of a global investigation team into the files leaked to the International Consortium of Investigative Journalists, reported Sunday that a “pile of evidence” has been found for paper companies set up in connection to Lee in Hong Kong.

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.

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.

The Pandora Papers investigation is a larger and more global follow-up effort after the ICIJ’s Panama Papers investigation in 2016, according to the organization.

It is not the first time Lee and the company have been accused of tax evasion.

Earlier this year, S.M. Entertainment was ordered by tax authorities to pay the government 20.2 billion won ($17.1 million) following a special investigation into suspicions that company money was leaked in corporate transactions.

In 2014, it faced a probe by the National Tax Service into tax evasion allegations, though the company at that time said it was a “routine checkup” conducted every few years.