By Ryu Jin
Staff Reporter
While the ``slavery contracts’’ between management agencies and new faces in the entertainment world have often emerged as serious social issues, South Korea’s corporate regulator has ordered SM Entertainment to correct its unfair practices in contracts.
Officials from the Fair Trade Commission (FTC) said Thursday that they instructed SM Entertainment, a major management agency, to correct problematic conditions included in its contract with Kim Ji-hun, a popular 26-year-old TV newcomer.
SM Entertainment has allegedly abused its predominant status over Kim, then-newcomer, to set an improper term of contract and insert an unfair clause on compensation for possible damages, according to the FTC.
``In a contract signed in October 2001, SM Entertainment put in a clause demanding compensation of up to five times its total investment,’’ an official said. ``It was set excessively unfavorable terms for Kim compared with other companies’ demands of two to three times the contract money.’’
It is not the first time that the agency has faced state sanctions. In July 2002, the FTC ordered SM Entertainment to rectify unfair practices in contracts with other individual entertainers.
Kim, who became famous after appearing in several television soap operas including ``Golden Apple’’ and ``Great Legacy,’’ has been engaged in legal proceedings for three years over the contract with SM.
SM Entertainment, set up by former singer Lee Soo-man, is a major producer of several pop stars. Initially, ``SM’’ was an abbreviation of the founder's name, but now it stands for Star Museum, alluding to the popularity of its star entertainers.
South Korea’s showbiz world has been hit by controversies over the so-called slavery contract, as some large management agencies misused their dominance over individual would-be stars.
However, there are also some small- and medium-sized agencies that complain of frequent betrayals by individual entertainers, who refuse to fulfill their contracts after emerging as big stars.