What is happening between Chen, Xiumin, Baekhyun and SM Entertainement

Two weeks ago, Chen, Xiumin, and Baekhyun announced that they would be suing SM for unfair profit distribution. 

The three members of EXO recently signed a contract under INB100 (Baekhyun’s new label) for their solo activities. SM Entertainment and INB100 then agreed that SM would take a 5.5% commission rate for albums and music as part of the settlement condition. 

On June 10, a representative of Chen, Xiumin, and Baekhyun held a press conference and alleged that SM was not fulfilling the conditions and that they engaged in unfair profit practices by demanding 10% of the revenue for solo activities (concerts, albums, etc.). 

Lee Jae Hak (attorney for EXO-CBX) then proceeded to state, “The agreement no longer has any meaning, so we will cancel the agreement made on June 18 [on the grounds of] fraud or terminate it on the grounds of non-fulfillment of obligations. We will also consider filing a criminal complaint and a complaint with the Korea Fair Trade Commission regarding the process of signing the agreement.” 

In response to these allegations, SM Entertainment explained that Chen, Baekhyun, and Xiumin had personally signed an agreement stipulating that they would pay SM Entertainment 10 percent of their revenue from individual activities in exchange for terminating their contracts early and that there had been no clause in their final agreement about a distribution fee because it’s the other company’s responsibility. 

On June 13, SM announced that they would be taking legal action against CBX to enforce the fulfillment of their contracts. 

On June 26, it was announced that Chen, Baekhyun, Xiumin, and INB100 filed a complaint with the Seongdong Police Station in Seoul against SM Entertainment’s CAO (Chief A&R Officer) and co-CEO for fraud in violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. 

In the meantime, Chen has released his 4th Mini album “Door”, which is available on www.ipurple.eu