EXO-CBX's agency launch counter-lawsuit against SM Entertainment executives over fraud allegations

EXO-CBX and their agency, INB100, have escalated their legal battle against SM Entertainment executives, filing a counter-lawsuit alleging fraud amidst a contentious dispute over financial agreements. The conflict stems from the departure of EXO-CBX members Chen, Baekhyun, and Xiumin from SM Entertainment last year, triggering a series of negotiations and legal actions.


The controversy reached a boiling point on June 10 when INB100, representing the former EXO members, convened a press conference to accuse SM Entertainment of breaching a previously agreed-upon 5.5% music record distribution fee. They further claimed that SM Entertainment unfairly demanded 10% of sales from EXO-CBX's individual activities while withholding crucial settlement data.


In response, SM Entertainment refuted these allegations, asserting that the EXO members continue to benefit from the group's brand and legacy. On June 12, SM Entertainment retaliated by filing a lawsuit against Chen, Baekhyun, and Xiumin, contesting the terms of their departure and subsequent financial arrangements.


Amidst the legal back-and-forth, EXO-CBX issued a statement on June 14, addressing the dispute and revealing efforts to propose an alternative agreement concerning payment for the use of SM Entertainment's music, assets, and brand. They claimed that their proposal was ignored by the agency, which proceeded with litigation.


The situation took a dramatic turn on June 25 when Newsis reported that EXO-CBX and INB100 had taken legal action against SM Entertainment's Chief Administrative Officer Lee Sung Soo and co-CEO Tak Young Jun. The complaint, filed at Seongdong Police Station, focuses on discrepancies related to the negotiated distribution fees and alleged financial misconduct.


In their statement, EXO-CBX and INB100 vowed to cooperate fully with authorities, pledging to disclose all relevant details, including last year's negotiations, to substantiate their claims. They also indicated their intent to challenge SM Entertainment's profit distribution practices in court, asserting that the agency's financial system is flawed.