SM Entertainment sues EXO-CBX members, demands 10% royalty

Members Baekhyun, Ximuin and Chen of boy band EXO's subunit EXO-CBX [SM ENTERTAINMENT]

SM Entertainment filed a lawsuit against Chen, Baekhyun and Xiumin of boy band EXO demanding they pay a 10 percent royalty fee that the members have reportedly been evading for two months.

The agency filed a civil suit against Chen, Baekhyun and Xiumin — collectively known as EXO-CBX, a subgroup of EXO — to the Seoul Eastern District Court a day earlier, saying that "CBX's nonsensical actions cannot be tolerated anymore."

According to SM Entertainment, the trio has been evading the 10 percent royalty fee that was agreed to in a contract signed in June last year after a monthlong back-and-forth between the two parties.

INB100, the agency that manages the three members' activities outside the EXO group, sent a formal letter of complaint to SM Entertainment on April 5 denying the 10 percent fee should be paid.

SM Entertainment had promised that INB100 would receive a 5.5 percent rate in its distribution deal at Kakao, with INB100 approving a 10 percent royalty in exchange, according to INB100. SM Entertainment failed to deliver its end of the deal, meaning that INB100 also has no obligation to pay its royalty, according to the trio's attorney Lee Jae-hak of law firm Lin.

SM Entertainment's suit is officially called "demand of performance," requesting that a party acts upon the clause in a signed contract. A suit demanding compensation is also likely to follow, according to industry insiders.

INB100 did not comment on the suit as of Thursday afternoon.