On June 1, CHEN, BAEKHYUN, and XIUMIN's legal representative issued an official statement declaring the termination of their contract with SM Entertainment.
Their accusation can be summarized into two points: unprovided documentation for payment and the forced long-term contract.
First, the artists' argument is that their payment was 'unclear' throughout the 12 to 13 years of the contracted period; they claim that the artists have never been provided with any type of documents to explain or provide data concerning the artist's share of the revenue they produced.
"SM Entertainment failed to fulfill their responsibilities by unproviding the documents including the total revenue of their activities as a group, as well as the basis and details that prove the amount of cut the artists take as stated in the original exclusive deal. Their failure to meet their obligations under the Popular Culture and Arts Industry Development Act becomes the basis for termination."
"Starting from March 21, the artists have demanded the agency to provide documents or copies clarifying the basis of the payment the artists received. It was repeated as many as seven times.", they wrote, "However, SM Entertainment's persistence of their unfair position in refusing to provide the requested documents has resulted in today's decision of CHEN, BAEKHYUN, and XIUMIN filing for termination of their contract with SM Entertainment."
"If the company has been paying their artists the rightful amount of payment, there would be no reason to refuse to provide the details.", they added, accusing SM of improper payment.
Then, their legal representative shared that the matter would be taken to court.
The legal representative cited a standard contract for K-pop artist released by KFTC (The Korea Fair Trade Commission) that established a seven-year general contract term, which is proof that SM Entertainment's contract is forcing the artists to be under unreasonably long shackles.
"For K-pop stars whose fans are mainly teenagers, them in their 30s having the same amount of popularity as in their 20s is nearly impossible. This super-long term bears a possibility to affect the artist's whole life, depriving them of their talents and possibilities."
Their side of the statement ended with CHEN, BAEKHYUN, and XIUMIN's explanation to the fans.
"It is severely challenging to take legal action against SM Entertainment which is a large company, but we started this process with hopes and courage to represent the years-old suspicions many SM Entertainment artists might have."
"We are sorry to worry our fans with this matter. Even though legal actions will be held due to differences in opinion on both parties, we will try our best to find the best solution to settle the conflict."
"This is a dreadful moment for us, trying to come forward against the piled-up unjustness. Please pay attention to our cry."
After CHEN, BAEKHYUN, and XIUMIN's announcement spread like wildfire, SM Entertainment quickly made an official statement.
According to the company, "the outside force" are coaxing the artists to make a wrong decision to breach the contract with SM Entertainment.
"They only care about the money, they do not care about the principles or the future of the artists. We will not stand idly by and take every legal action needed.", they wrote.