A Cosmetic(s) Discourse, Part IV:
The Pile of Chimney Refuse Calling the Kettle Black
A big chunk of the cosmetic discourse is dedicated to sullying the reputation of Crebeau, the cosmetics business that the three members of Dong Bang Shin Ki invested in. The discourse paints Crebeau as an illegitimate, corrupt and dodgy enterprise with a strong possibility of involvement in criminal activity. As stated before, it is not the purpose of this series to either confirm or dispel these accusations; in any case, the majority of these rumours have already been systematically disproved by Korean fans. Rather, the penultimate instalment of this series is proud to present to you the most amusing case of the pot calling the kettle black ever encountered in K pop history.
Judging from the way Crebeau is described in every statement issued or approved by SM Entertainment, one would think that Crebeau was not so much a cosmetics business as it was a crime syndicate. Not only has SM accused it of being “unethical” and using “questionable business practices” but has heavily implied that the company is engaged in criminal activity. For a while, the Hotel Girls attacked the cosmetics company for being a “multi-level company” or operating along the lines of a “pyramid scheme”. Then there were the rumours that Crebeau intended to get on the Kosdaq—the Korean stock exchange—through “backdoor listing”. Last, but most definitely not least in appalling impact, came the accusation that Crebeau was using illegal sheep placenta in its products.
In reality, the Hotel Girls themselves confessed upon investigation by the Korean police that they had deliberately fabricated the majority of those accusations[i]. They confessed that Crebeau is not a multi-level company, that there is no evidence aside from SM’s insistence that Crebeau was looking to engage in backdoor listing, and acknowledged that sheep placenta is not an illegal ingredient but a common additive in cosmetics products worldwide. Subsequent visits by Korean fans to the Crebeau headquarters in Korea where they were shown the company’s documentation further conformed that Crebeau is not a multi-level company but an average small-to-medium enterprise. And it was expanding via means that did not require backdoor listing, at least not yet.
However, if these rumours had been true, and Crebeau was utilising a multi-level structure or intending to get registered on the Korean stock exchange through backdoor listing, would the company deserve to be labelled a criminal enterprise on the level of the mafia?
Upon a cursory investigation, one realises that a multi-level company is not so much a company structure per se as it is a marketing strategy, similar in many ways to a pyramid scheme but not the same thing[ii]. While it is inefficient, risky and highly unadvisable, it is certainly not illegal (though the same could not be said of pyramid schemes). And backdoor listing is apparently what SM chooses to call an M&A—Merger and Acquisition—whereby a small, unlisted company merges into a large listed company and becomes part of that listed company. Large companies commonly absorb their smaller and more nimble rivals in this way to acquire new technology and market share[iii]. Backdoor listing is neither risky nor unadvisable. According to a colleague who specialises in business law, it’s actually something that every large company ought to do if it wants to maximise competitiveness without devoting its entire budget to R&D (Research and Development). Backdoor listing thus certainly doesn’t amount to anything as exciting as criminal activity. If anything, it seems to be so unremarkable that it doesn’t even have its own entry on Wikipedia.
Once again, the claims made by the cosmetic discourse turn out to be much ado about business banalities.
While the cosmetics discourse is busy slinging mud at Crebeau and the members of JYJ, it also seeks to confer sainthood on SM Entertainment, presenting it as the sole party with good faith in the entire affair. SM is portrayed as being righteously horrified by the supposed criminal nature of the cosmetics business and trying to stop the three members from investing in it out of concern for the boys’ professional reputation and wellbeing. The ever-caring and selfless teacher, boss and parent, SM is presented as trying hard to keep Dong Bang Shin Ki together, even in the face of JYJ’s ungrateful unresponsiveness.
For anyone who is even a mite familiar with SM’s history, this is a laughable assessment of the management company.
The Plank in the Eye is Worth Two in the Toilet
Getting acquainted with the history of SM Entertainment is much like eating dung that one mistook for chocolate. One can keep chewing in the hopes of it turning into chocolate at some point, but in the end it’s still dung. The illustration is as apt as it is unfortunate given that Lee Sooman, the founder of SM, most likely studied the properties of dung as a Farming and Agriculture major at Seoul National University[iv].
Those who remember Lee Sooman remember him as an unremarkable student and even more unremarkable singer that reached the apex of his career when he won a university singing contest in the 1970s. He tried to free-ride off the immense popularity of folk music in his day as well as that of his contemporaries like Yang Huieun and Cho Youngnam. Not quite succeeding and more interested in making money anyway, Lee turned to radio DJ-ing in the 1980s where he gained a moderate following and more than moderate connections in the entertainment industry that he would utilise later on. Sometime in between, he managed to go to America as an exchange student, where he excelled in English so well that the English lyrics to the songs he produced for his signed artists still make absolutely no sense.
Witnessing the explosive artistic local phenomenon that was Seo Taiji and Boys, Lee was struck with the brilliant idea of turning young talents into objects, commercialising their music and marketing the entire package like a product to make himself a millionaire. The first result of the application of this idea—and SM Entertainment’s first real hit product—was H.O.T., a five-member male idol group that took Korea by storm and initiated Korea’s idol craze. The group debuted in 1996 but disbanded by 2001. The group sold over 12 million albums in Korea alone, but it was revealed around the time of their disbandment that the band members made a penny (100 won) for each album sold.[v] Thus, as early as 2001, SM Entertainment was already being accused of drafting and binding their young artists to unfair contracts; as early as 2002, Time Magazine was calling these contracts “slave contracts”[vi].
Three former members of H.O.T—Jang Woohyuk, Tony An and Lee Jaewon—formed a new group, JTL, after H.O.T’s breakup, but SM Entertainment happily used Lee Sooman’s connections in radio and television, once used to actively promote H.O.T., to now block JTL’s media appearances. Their music videos would rarely be played on music channels and their scheduled appearances would be cancelled out of the blue for no reason. Is any of this sounding familiar to JYJ fans? SM similarly dogged Shinhwa, another of its idol groups and perhaps the only one to escape the company completely and successfully. In 2002, when Shinhwa’s contract came to an end and all members of the group decided to leave the company together—despite Lee Sooman’s overtures to two key members that would have led to the disbandment of the group—SM took the group to court, demanding that Shinhwa not be allowed to use their own group name after leaving SM since it was the company that created the group and owned the name[vii]. This too probably rings familiar to JYJ’s fans. Thankfully, the court ruled in Shinhwa’s favour, reiterating that SM does not own Shinhwa in either name or form.
Not only is Lee Sooman and SM notorious for mistreating their artists—allegations of physical abuse by SM personnel inflicted on the company’s young singers and trainees are the prime concern of fanclubs of practically every SM idol group[viii]—the company has a long and proud history of being subject to investigations for corruption, bribery, embezzlement, stock market manipulation and tax evasion[ix]. Even in the days of H.O.T., Lee Sooman was criticised for abusing his position as a radio DJ and his connections in the industry to determine who would get air-time and who—because they “betrayed” and left the company—didn’t.
The company was even physically raided several times by prosecutors in 1995, 1999 and 2002, but due to a suspiciously convenient lack of incriminating evidence at the site—evidence interestingly enough that SM continues to drag its feet in materialising in spite of several court orders to do so—it was let off the hook each time[x]. In addition, the process of the present lawsuit has exposed practices of “double-dipping”, whereby the same company rips off the artist more than once under different company names, committed by SM with regards to Dong Bang Shin Ki’s Japanese profits[xi]. Apparently this is only the tip of the iceberg. The accounting practices of the company must indeed be positively horror-inducing, if not outright criminal, for SM to continuously fail to bring their accounting records to court and to be reduced to formally asking the judge to cancel JYJ’s official evidence retrieval application for those documents[xii]. And such a company believes it is in a position to talk smack of another!
Things have not gotten much better, it appears, even after Lee Sooman’s formal departure from the company. Kim Young Min, the current CEO of SM Entertainment, is demonstrating that he is dead-set on carrying on the proud traditions of his predecessor, including the abuse of industry cartels and connections to distort the Korean music market in his and his company’s favour. It is no secret in Korea that the mainstream media outlets in the country are firmly under the control of Korea University graduates. Of SKY—Seoul National University, Korea University and Yonsei University, the traditional elite universities of Korea—for a long time only Korea University had a media studies department as well as a history of securing executive positions for their graduates at the three main TV broadcasting stations in Korea (MBC, SBS, KBS)[xiii]. Would Kim Young Min, as a Korea University graduate himself, be able resist the temptation to use the vast sunbae-hoobae network at his disposal in order to actively block and persecute the members of JYJ? And in the midst of the controversy and public outcry caused by the revelation of the content of Dong Bang Shin Ki’s contract, SM decides to hand out year-end bonuses to its executives whilst diminishing the paycheque of their other employees and obstinately avoiding necessary internal reforms[xiv].
If this is the behaviour of those with good faith then we shall all be deprived of Christmas presents for quite a while, because Santa will be skipping our galaxy for Andromeda.
The Purpose of Chimney Dust
At this point, to compare SM’s actions against Crebeau to ‘the pot calling the kettle black’ would not be entirely fair. It would be an insult to the pot. In truth, SM Entertainment is so disintegrated and consumed by its own rottenness and corruption, to which it alleges to be blind, that it has come closer to resembling a pile of chimney dust. And as the Victorians knew full well, chimney dust exists for one purpose and one purpose only—to be swept away.
Unless of course, SM Entertainment performs a miracle and undergoes a truly Biblical transformation into a squeaky clean pot. It shouldn’t be too difficult for one that already sees oneself as a saint.
Written by: Jimmie of TheJYJFiles
Shared by: TheJYJFiles
Please do not add/remove credits
[iv] See Russell, Mark James. Pop goes Korea: Behind the Revolution in Movies, Music, and Internet Culture. Stone Bridge Press: Berkeley, California, 2008, pp. 133 – 165
[v] ibid., p. 154
[x] Russell, Mark James. Pop goes Korea: Behind the Revolution in Movies, Music, and Internet Culture. Stone Bridge Press: Berkeley, California, 2008, p. 161
[xiii] A Korea University graduate who would rather not be named