3 EXO members file complaint against SM executives on fraud charges

Three members of popular K-pop group EXO have lodged a criminal complaint against two executives of their management company, SM Entertainment, worsening a renewed conflict with the agency, according to industry insiders Wednesday.

The trio — Chen, Baekhyun and Xiumin — along with their solo career label, INB100, reported SM’s Chief A&R Officer Lee Sung-soo and co-CEO Tak Young-jun to the police on fraud charges the previous day, the insiders said.

The members allege that SM Entertainment has reneged on a key promise to allow a reduced commission rate of 5.5 percent for their individual albums and music distributed through Kakao Entertainment, a subsidiary of SM’s parent company, Kakao Corp.

The members also perform as EXO-CBX, a three-member subunit of the nine-piece group.

SM, however, has been “unfairly” taking 10 percent of the revenue from the members’ private activities under an agreement signed between the two sides a year ago with the promise as a precondition, they claimed.

The dispute between the three EXO members and their agency is not new. A year ago, the trio unilaterally notified the agency of a decision to terminate their exclusive contracts with the company, citing its failure to provide proper accounting data. The conflict seemed to have been resolved when the two sides announced that the trio agreed to maintain the contracts after reaching an agreement based on smooth communication.

It was later learned that the trio agreed to pay 10 percent of the revenue from their private activities in exchange for pursuing their solo careers separately from group activities through a private label.

However, during a press conference earlier this month, the trio’s attorney said his clients will no longer honor the agreement as SM refuses to fulfill the promise for the 5.5 percent commission rate.

SM refuted the allegations of the “unfair” demand, noting it was the three members who signed the agreement themselves.