The artists signed contracts with SM for 12-13 years and have faithfully carried out their activities as members of EXO.
As mentioned above, during the long years they had been signed to SM, the members had trusted SM when it came to their payment and have received their payment along with accounting documents provided by SM. Recently, the artists, through their lawyers, have asked on several occasions for the accounting receipts, but SM has stated they wouldnโt be able to.
SM is obligated by law to provide its artists with a full history of income generated, expenses subject to tax deduction, and deduction amount. As the aforementioned exclusive contract states that the artists are received a payment settlement twice a year, a full accounting should also be provided twice a year. However, during the 12-13 years they had been signed to SM, the agency has never provided these documents.
According to precedent, if the agency does not provide an accounting, the artist is deprived of their right to question and challenge the amount received, and hence not providing the documents is ground for contract termination. And because, despite many requests, SM has not provided the documents, there is legal ground to terminate the contract.
Despite the artists firmly requesting the documents by May 31, and because SM has not provided the documents, unfortunately, as of June 1, we are notifying you that the contract has been terminated.
Had SM paid artists accurately, there is no reason why it could not have provided the documents. The fact that SM is not able to provide the documents means that SM has not been paying the artists fairly, and as such the artists will exhaust all legal option to look at the requested documents.
Also, if the artists (Baekhyun, Xiumin, Chen) are not the only ones who have not received transparent accounting, this might be an issue with all other SM artists as well.
In reality, it is difficult for Baekhyun, Xiumin, and Chen to engage in a legal battle with a company as large as SM, but they have mustered up courage knowing that they will be representing the suspicions of other SM artists.