SM Entertainment reportedly exposed for maliciously manipulating the public opinion on HYBE Labels during the two company's conflict last year

On Tuesday, July 23, the Korean media outlet, Ten Asia, released an article expressing that SM Entertainment allegedly hired an outside company to manipulate the public's opinion on HYBE Labels during their conflict in 2023, when HYBE tried to acquire SM and become its largest shareholder.

The article further explained that SM Entertainment's contract with a Public Relations agency, Astrafe, was to allegedly spread information that was favorable to the agency and unfavorable and disadvantageous to HYBE Labels. Additionally, the media outlet reported that this is the first time any agency has been exposed for hiring an external company to maliciously manipulate the public's opinion.

This piece of information was added to another piece of news about Kakao's founder, Kim Bum-soo, who was reportedly arrested on charges of manipulating stock prices in order to prevent HYBE's acquisition of SM Entertainment. Therefore, it was revealed that the entertainment agency was allegedly involved in manipulation in terms of stocks and public opinion.

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All you need to know about SM Entertainment's conflict with HYBE Labels and their recently exposed public opinion manipulation

At the beginning of last year, SM Entertainment and HYBE Labels entered a conflict when HYBE bought stocks from SM, which led to HYBE becoming the largest shareholder of the entertainment agency. However, things soon began to heat up when Kakao Entertainment also entered the scene and fought against HYBE to become SM's largest shareholder.

When the news landed on the internet, netizens shared their concerns over HYBE becoming the monopoly of Korea's entertainment industry, with almost every large K-pop artist being covered under HYBE. However, things settled when Kakao won the battle of buying SM's largest stake. Regardless, it was recently reported that much of the reported media play was allegedly involved in the conflict from SM's side.

Ten Asia reported that SM Entertainment signed a 1.38 billion won contract with Astrafe, and though SM stated that the contrast was purely for banner advertising, Ten Asia explained otherwise. They put forth several pieces of evidence that allegedly expressed that the two's relationship was more than just based on banner advertising.

The media outlet revealed that Astrape reportedly created a Telegram chat room called 'Str' on February 27, which included two SM employees, the director of Astrafe, and three representatives of viral companies. There, several discussions between the six individuals on allegedly presenting SM in a favorable light while showcasing HYBE unfavorably took place.

Additionally, the agency also allegedly wrote and spread articles on how HYBE's acquisition of SM might lead to several disbandments in the K-pop industry. The conversations revealed that they spread information on how HYBE's acquisition of SM would leave no choice but for certain groups to disband HYBE's command.

One of the alleged SM executives in the reported 'Str' telegram group chat stated the following to the other members in the chatroom:

"So far, the groups that have disbanded after HYBE took over are GFRIEND, NU’EST, and Pristin. HYBE is making takeover bids because they need to eat first and they can do something. But as a result, even in the stock market, I don't sell HYBE shares because I think it is better for the current management of SM to be on the board of directors than for HYBE to be on the board of directors".

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Moreover, there was also representation of SM Entertainment in a favorable manner. They allegedly put forth a narrative that they chose to not sell their stocks to HYBE in order to safeguard their artists and protect the K-pop bands from disbanding.