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A meaningful change occurred at the general shareholders' meeting of SM, a large entertainment company.

Minority shareholders and large shareholders competed over the issue of appointing an auditor, and the minority shareholder won.

The news raised the company's stock price.



Correspondent Jo Ki-ho.



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SM Entertainment's general shareholders' meeting started 2 hours later than planned.



This is because both the company and minority shareholders have carefully checked the power of attorney.



The issue at the shareholders' meeting today (31st) was whether an auditor proposed by minority shareholders would be appointed.



It was Align Partners, an asset management company with a 0.9% stake, that opened the door.



In a letter sent to SM on the 2nd, Align demanded, "The company has requested that the largest shareholder, Lee Soo-man, terminate the service contract with the private company of general producer Lee Soo-man."



SM paid 24 billion won last year alone and a total of 140 billion won over 22 years to this producer's personal company, Like Planning, through royalties, etc.



[Seong-Joo Kim / Manager of Align Partners: The fact that this transaction takes place is a special transaction with the largest shareholder…

Amount is also an issue, but we paid much attention to procedural issues.

Even a producer who was not really affiliated with SM's board would have paid that much...

.]



Align appealed to minority shareholders to appoint a new auditor, and the producer, who owns 18% of the stake, won an overwhelming victory in a vote contest.



As the news spread, SM's stock price hit a mid-day high.



It is unusual for a minority shareholder to pass an important agenda such as the appointment of an auditor at the domestic general meeting of shareholders.



[Lee Su-won / Korea Corporate Governance Service Responsible Investment Team Leader: Compared to the past, it seems like a really encouraging thing.

Wouldn't it be an opportunity for institutional investors who advocate activism to make more shareholder proposals in the future by seeing cases where such candidates were passed?

.]



SM announced today that it will use the shareholders' meeting as an opportunity to increase shareholder value.



(Video editing: Park Ki-duk, VJ: Park Hyeon-woo)