KONNECT Entertainment was founded on June 5, 2019 as a one-man agency by Kang Daniel after winning an injunction. Key people at the helm included Kang Daniel as CEO/founder, Bong Saerom (Executive Director, uncertain start year but has 2020 album credits), and Kim Taeyoub (Vice President since 2022).
Below contains an overview of how KONNECT Ent began and the events leading up to its 5-year anniversary that had netizens speculating the agency was experiencing major changes. It was later revealed there were shareholder corruption issues.
Daniel’s quest for a new company in 2019 during an ongoing lawsuit was difficult. Per Rolling Stone India, after dead-end hunts for a new label, contracts falling apart, and the media analyzing his every move, Kang Daniel wanted to create a platform where he didn’t have to depend on tight systems and contracts and eventually give that opportunity to others. Daniel divulged, “Everything was a challenge every step of the way, every day was a challenge. Because I think it was unprecedented. I […] had started off in a group and then just kind of got separated from that group, and due to a couple of issues, couldn’t continue in the entertainment world, so had to come back as an individual artist and start from scratch. So, it truly was challenging. But because I had the team, because I had my fans, and because of all of the support of the people that trusted my work and had faith in me and my music, I think that I could find the stability that I have now and I still can find that stability to go on and carry on with my labor.”[s]
KONNECT Entertainment began expanding its artist lineup in 2021 and was even holding idol trainee auditions, seemingly looking to grow long-term.
In late 2023, dance crew We Dem Boyz (WDBZ)’s fandom suspected the 1-year contract ended after SNS updates ceased in October. In early 2024, WDBZ sub-leader and former in-house performance director Kim Ingyoo unofficially confirmed his team’s departure during his Instagram live broadcast.
Meanwhile, the remaining signed idols’ schedules and content updates noticeably decreased. Daniel’s last official schedule was his January RE8EL Japanese EP showcase, while Yuju’s was in February for Transit Love 3. On March 8, Daniel replied to a fancafe post asking about good news soon, “Yeap could you wait for me just little bit more?”[s] Thus, Daniel’s fandom assumed he would make his comeback soon.
However, March introduced more business operations changes. Beginning mid-March, Cafe de KONNECT handed out merchandise through several guerilla giveaway events.[s] [s] The idols’ content updates stopped.[s] [s] On March 28, staff posted that Kang Daniel’s fancafe app would close on April 1.[s] Daniel posted on April 5 before the fancafe shut down, “Ah, what is this? The app is still working.. ㅠㅠ I miss everyone so much. I have a looooot of things to say too! But can you give me a little bit more time? ㅠㅠ I’m sorryyy.”[s]
On April 9, KONNECT’s office building was publicly advertised for rent (400 million won deposit [~293k USD], 33 million won [~24k USD] monthly rent). The company’s lease ended May 28, 2024.[s] On April 18, the KONNECT signs were removed from the headquarters’ exterior.[s] [s] [s] [s] Cafe de KONNECT, which was on the 1st floor, clarified via Instagram Story, “We would like to inform you that the business has been closed due to relocation of the office building.”[s]
After the company’s drop-off in activity during 2024’s 1st quarter, the general public was not aware of KONNECT’s exact whereabouts or plans until May 20, 2024. News broke that Kang Daniel filed a criminal complaint against his company’s largest shareholder on multiple charges.[soompi]
The below timeline is updated from the start of the dispute between Kang Daniel and KONNECT Entertainment’s majority shareholder “A” (pseudonym used by media outlets at the time when the shareholder’s identity was not disclosed).
On May 20 at 2:07 PM, YTN broke the news that Kang Daniel filed a criminal complaint to the Seoul Metropolitan Police Agency against “A”, pseudonym for KONNECT Entertainment’s majority shareholder. Charges included forgery of private documents, embezzlement, breach of trust, violation of information and communications network, and computer fraud.[s] [soompi] Korean media also surmised that because Daniel’s contract expires in early June, he would part ways with his agency once the contract period ends.
“A” held approximately 70% of KONNECT’s shares and was known to be the company’s actual owner. The dispute centers around a 10 billion won (approximately $7.4 million USD) advance distribution contract. Kang Daniel claimed “A” used his name and company seal without his knowledge to sign this advance distribution contract in December 2022. Daniel said he only discovered the contract in January 2023, a month after it was signed.
In the music industry, an advance distribution contract involves receiving a large investment from a distributor. The artist repays the distributor through profits from music and album sales. KONNECT received an initial investment of ~8.8 billion won (~$6.5 million USD) through this contract. Kang Daniel reportedly repaid around half of the amount while promoting his album REALIEZ in 2023, leaving ~4.5 billion won (~$3.3 million USD).
Despite Kang Daniel asking “A” several times for details on the contract’s procedures and terms, he did not receive a proper answer. Daniel only became aware of the contract’s existence after obtaining bank transaction records. Additionally, Daniel filed a complaint alleging that “A” withdrew large sums from his company’s accounts, used corporate cards inappropriately, and withdrew substantial amounts from his personal bank account without his consent.[s] [yonhap]
Kang Daniel’s legal representative Park Sungwoo from Wooree Law Firm confirmed they filed a criminal complaint against the KONNECT majority shareholder. Daniel had made every effort for over a year to minimize damages to the artists, employees, and third party contractors; however, with a heavy heart, he decided there was no other solution but to hold the responsible party legally accountable. Full translation of the statement can be read here.[s] Below summarizes the charges’ main points.
1. Regarding the charges of forgery of private documents:
In January 2023, Daniel discovered that a 10 billion won (~$7.4 million USD) advance distribution contract was signed in December 2022 using the CEO’s name and corporate seal. The contract was signed without the CEO’s approval nor artist’s consent. Despite multiple inquiries about the contract’s procedures and key details, no answers were provided. The client had to confirm the facts by personally obtaining bank transaction statements.2. Regarding the charges of embezzlement:
Over 2 billion won (~$1.5 million USD) was withdrawn from the company’s account through overseas remittances and business income processing methods. This did not go through proper procedures, such as CEO approval, board of directors resolution, or general shareholders meeting resolution.3. Regarding the charges of breach of trust:
An undesignated corporate card was used to spend over tens of millions of won. This was falsely recorded in the accounting ledger as props expenses.4. Regarding the charges for violation of information and communications network & computer fraud:
While checking the company’s financial transaction records, Daniel found that over 1.7 billion won (~$1.3 million USD) was withdrawn from his own bank account without his knowledge.
Daniel’s lawyer wanted to correct one thing reported in the media. While the advance contract is worth about 10 billion won, it is difficult to directly add that to the company’s damages. The media report that the shareholder’s actions caused a loss of 14 billion won is different from the facts of the complaint.
Attorney Park concluded, “We express our gratitude and apologies to those who read the related articles and are concerned about Kang Daniel’s damage and distress. We are well aware of the worries that arise when legal proceedings are underway, having already experienced that once. However, the client has mustered great courage in the hope that such unjust incidents will no longer occur in our pop culture and arts industry and that this case will be the last. We will convey our position again once the authorities conduct a thorough investigation and the facts are clearly revealed. Thank you.”
Daniel’s articles were among the top news on Naver that day, ranking at #3 and #6.
A day after the shareholder news, media outlets reported that We Dem Boyz, Yuju, and Chancellor have left the company following contract expiration. We Dem Boyz’s contract expired in November 2023. Yuju decided not to renew her contract when it expired mid-April 2024, making her a free agent. Singer and producer Chancellor is said to have already left as well.[s]
Star News wrote that Daniel plans to leave KONNECT Entertainment as soon as his exclusive contract ends in early June. He will not renew the contract and will also step down from his position as CEO and resign from the company.[s] [zapzee]
According to multiple music industry insiders, KONNECT Entertainment has virtually entered the process of going out of business. All of the agency’s estimated 20 employees have been laid off or resigned. Other artists left the company after their contracts expired. Per a Joynews24 exclusive, the majority shareholder “A” reportedly decided to leave in light of the lawsuit. KONNECT recently vacated its office building in Gangnam, Seoul and liquidated the corporate vehicles. The official company website was no longer accessible.[s] [s] [zapzee]
Kang Daniel’s close associate told The Fact, “Kang Daniel has spent time trying to resolve and correct what happened without his knowledge. But he also tried not to cause harm to other artists who signed with KONNECT. That’s why he only filed a complaint now that all the artists have left.”
According to sources, Daniel released his 4th mini album REALIEZ last year and repaid a significant portion of the advance investment made without his knowledge. He tried to release another album to settle the rest, but even this did not work out as planned. In the end, all he could do was sue the major shareholder.[s]
Note: The article is mostly an opinion piece. The writer’s opinions do not necessarily reflect the positions of other entities.
Kang Daniel’s fandom DANITY participated in a supportive message event during the last weekend of May. Fans sent words of cheer and encouragement, organized under the hashtag #AlwaysWithDaniel.[s] The fandom continued to use the hashtag to show their support even after the weekend event ended.
News1 revealed more details and provided a look into Daniel’s future plans. After becoming aware of the shareholder’s misdeeds, Daniel made efforts to resolve the issue for about 1 year and 5 months. This period was also when Kang Daniel went on a world tour. He worked hard to protect his company KONNECT amidst the complex situation. In particular, it is said that the major shareholder’s problematic actions were not formalized to prevent harm to the artists, as their exclusive contracts were still in effect.
As for Kang Daniel’s future activities? Firstly, as he has filed a criminal complaint against the majority shareholder, Daniel plans to focus on resolving the situation. Additionally, he will consider finding a new nest for his singing career.
A producer who has been observing this process told News1, “There have been efforts made and endurance shown in trying to resolve such issues in difficult situations. The artists under the agency have quietly supported Kang Daniel without revealing or making an issue of such problems.”[s]
On June 5, 2024, the 5-year anniversary of KONNECT’s founding, Kang Daniel’s Japanese management announced they would close the DANITY JAPAN fan club on June 30, 2024. Due to the closure, they will stop accepting new memberships and renewals as of June 7, 2024. For memberships that expire after July 2024, they will refund the remaining period up to the expiration date on a pro rata basis. In addition, the shop will close on June 9.[s] [s]
On June 9, 2024, Kang Daniel posted a letter on Instagram announcing the end of his time with KONNECT Entertainment.[s] [s] [s] [soompi]
Hello, this is Kang Daniel.
Already half a year has passed. As the weather gets warmer, I realize how quickly time flies.
My journey with KONNECT, which has been my shelter over the past five years and taught me a sense of responsibility, has come to an end.
I would like to express my sincere gratitude to all the employees and stakeholders who have led KONNECT through laughter and tears with me. I will not forget this feeling.
Although it is sad and regrettable to end this journey with unpleasant news, I will quietly and diligently work through it, just as I have always done. I will use this time to think deeply about a better future.
And to our DANITY, who are surely thinking of me more than anyone else right now!
I will continue to be by your side as Kang Daniel. I’ll do my best to bring you good news soon, so please don’t worry too much and make sure to eat well!
Thank you.
Per Sports Donga, reports suggest that Kang Daniel is in the process of contacting a new agency.[s]
Daniel’s article was among the top news on Naver that day, ranking at #12.
Shortly after on June 10–11, Daniel was confirmed for Waterbomb Seoul (July 5) and Fukuoka (July 13).[s] [s]
On June 21, 2024 5:39 PM, a Twitter account claiming to be Kang Daniel posted about a free mini fanmeeting.[s] [s]
Hello, this is Kang Daniel.
This is something I’ve wanted to try at least once.
I would like to take some time to talk with my fans, even if just in a small way.Please refer to the image and reply below for more details! ☺️
Kang Daniel confirmed the account was valid by linking to it on Instagram Story.[s]
The June 30, 2024 event is for 100 randomly selected 3rd gen fan club members. The application deadline is June 24.
On June 30, 2024, Kang Daniel will host a mini fanmeeting ahead of starting his Waterbomb July schedules.