Fair Trade Commission issues corrective order to SM Entertainment... Incomplete contract with exhibition hall design company

[Asia Economy Reporter Moon Chaeseok] SM Entertainment was sanctioned by the Fair Trade Commission for illegal activities, including issuing incomplete contracts missing payment amounts to subcontractors entrusted with creating an artist exhibition hall.

According to the Fair Trade Commission on the 15th, SM signed contracts with Company A four times from July 1, 2017, to June 15, 2018, to outsource exhibition content planning and design, as well as space and graphic design work, to create an exhibition hall featuring its affiliated artists.

SM issued written contracts only after the contract periods had already started for all four contracts. In the fourth contract, which entrusted Company A with space design, planning, and graphic design work, SM issued an incomplete written contract that did not specify the finalized payment amount.

The written contract stated that the first payment would be 1.1 billion KRW (excluding VAT), but regarding the second payment, it only mentioned that after the final work was completed, the remaining balance after deducting the first payment would be paid following settlement and verification of the estimate details.

Issuing a written contract after the subcontractor has already started the service and failing to specify the subcontract payment amount in the written contract violate Article 3, Paragraph 1 of the Subcontracting Act.

The Fair Trade Commission stated that SM acknowledged the legal violations and accepted corrective orders to prevent recurrence.

This content was produced with the assistance of AI translation services.