More problems with the cosmetics company

This is the second part from my previous post about the issues with the cosmetics company.

In his interview, President of Crebeau talks about the lawsuit between their Chinese distributor and Crebeau. He blames the Chinese distributor for using TVXQ in the promotion without the company's permission. He talks about the distributor selling the products with TVXQ's concert tickets 

Also, many fans probably don't know about this, but there was another lawsuit from Crebeau's distributor. It was briefly mentioned in Allkpop.

http://www.allkpop.com/2009/12/tvxq_accused_of_yet_another_fraud

I don't know the result of that lawsuit because I couldn't find any information about it.

Both companies claim that they invested in Crebeau believing that CJS would participate in their promotional activities in person, and they're suing Crebeau and the 3 members of TVXQ for fraud when the 3 failed to make appearances.

I don't know the exact content of their contracts, but it is obvious both distributors believed CJS would be involved in the promotion, but their failure to participate resulted in the lawsuit.

But more importantly Crebeau does not have capacity or willingness to control their distributors' usage of TVXQ name.

Here's an internet ad from Beijing Kowloon Station Inc.

As you can see from the ad above, Yunho's picture is in the ad which is a serious violation of his rights, and Crebeau did not or could not control it. I suspect Crebeau only reacted to it after the lawsuit was filed against them. The interview states that Crebeau stopped the Chinese company from using TVXQ name any further, but when Crebeau itself was practically using TVXQ for promotion, and the fact his interview was filled with lies, I don't think anyone can really trust his statements.

Then there was this article from Korea regarding the lawsuit between Crebeau and Beijing company.
http://sportsworldi.segye.com/Articles/EntCulture/Article.asp?aid=20091120003969&subctg1=30&subctg2=00

That article talks about the lawsuit filed against Crebeau and how it tarnished TVXQ's image in China. Then the article concludes that even though the lawsuit is against the 3 members, SM needs to be involved to resolve the issue.

See how SM is dragged into this even though it had nothing to do with the business? That's really not fair for SM, but it cannot be avoided since SM is forever linked with TVXQ.

CJS's involvement in the business caused TVXQ's brand to be tarnished, and the abuse to the TVXQ brand got out of control. Most fans don't think about these possible issues, and simply do not understand why SM would stop CJS's personal business, but now the reasons are obvious.

Because of the business that had no control over its distributors, TVXQ's name was abused, and TVXQ got involved in 2 fraud cases further damaging its value.

I've talked about Crebeau's Chinese distributors, then how about Crebeau itself?

In his interview, Kang claims Crebeau was in business for 12 years and has over 100 stores in Korea alone, making it sound like the business is legit, big and has plenty of experience.

I visited Crebeau home page, but couldn't find a list of stores. I searched the web, and I only found just few stores that are already known to be owned by CJS and their family. So what happened to the rest of the stores? If there were 100s of stores in Korea, I should've been able to find many more Crebeau cosmetics stores, but even the company's home page doesn't list any of them. Granted, the interview was from 1 1/2 years ago, but I don't think 100 stores can all vanish in that period of time, and at least some information should still be on the web.

Then from the company's history page, I found that in 1997, the owner found a company named "Suk-Hwa Trading" (석화무역).
http://www.crebeaushop.co.kr/html/newpage.html?code=2

I searched the web again, and found the name in the list of businesses using Network Marketing (politically correct name for pyramid or multi-level business).
http://www.a24s.com/data/%B3%D7%C6%AE%BF%F6%C5%A9%B8%B6%C4%C9%C6%C3%BE%F7%C3%BC.htm

First company on that list is "Amway Korea" (we all know what that company is), and when you search "Suk-Hwa (석화)", you see "Kang Seok Won (강석원)" as the company representative. Interesting, isn't it?

Out of curiosity, I went to the Fair Trade Commission website, and searched "Crebeau (끄레뷰)", and found the following from "Communication Business List" (basically means internet sales).

The oldest one is by Kang, and it's registered in 2006. There's also "crebeau-kiss.com" which is owned by Yuchun, but that store is out of business now. If you go to that website, it links to another store that sells Yuchun's merchandises.

You can also search for "Door to door sales" businesses, and I found Crebeau there as well.

It is registered on the same day as the other one.
You can get the same info from the link below, and you're on your own with the menus. :)

http://www.ftc.go.kr/info/bizinfo/visitList.jsp

Ok, so in 1997, the owner found a multi-level company, then registered "Crebeau" in 2006 for "Internet Sales" and "Door to door" business. Internet sales, I understand, but door to door sales?

My guess is that 100's of stores are from the owner's multi-level business, and actual Crebeau brand was started a lot later. I also read from someone's blog (I'm not going to link the blog because of sensitivity regarding this issue which will be explained later), the business registration for the cosmetics manufacturing for Crebeau cosmetics started in 2009. I couldn't verify it myself since I'm not in Korea, but it all makes sense. Kang did some business with Sheep's placenta extract since 2000 according to the document from the link below, but the actual cosmetics business didn't start until 2009. He might have distributed some cosmetics product produced by someone else through the "door to door" business created in 2006, but the actual products manufactured on their own didn't start until 2009 when CJS joined the business.

The link below has scanned copies of documents from Korean FDA, and Japanese government branch (I don't know exactly what, but I'm guessing similar to FDA), with dates when the ingredient's from Sheep's placenta was approved for safety. Notice that Korean FDA approved the placenta extract to be used as processed food, but I don't know how that applies to cosmetics. The site's main page links to Yuchun's merchandise site, but their old pages are still active.

http://www.crebeau-kiss.com/bbs/zboard.php?id=faq&page=1&sn1=&divpage=1&sn=off&ss=on&sc=on&select_arrange=headnum&desc=asc&no=3

All of my findings also agree with the statements by HoMin's fathers where they talk about the business being multi-level. TVXQ and the business that might've been a multi level marketer? Please.

No wonder HoMin didn't want to join the business.

I visited Crebeau-Jeff website which is associated with Jaejoong (I don't know if the business is registered under his name, but most fans know it's his store), and found the ingredient page explaining how they get the sheep's placenta.

http://www.crebeau-jeff.com/sub1_2.php

It's in graphics, so you can't run it on a translator, but I'll type part of the text below so the readers can translate them and also compare with the original text. The table below lists differences between sheep's placenta and human placenta to show the advantages of using sheep's placenta. (What???) I don't know who decided to market the products comparing the placenta from sheep and human, but.... I lost words to say. I guess the sheep's pictures are ok, or not.

양태반이란?

끄레뷰 양태반 추출물은 양태반 + 양배태(3개월 미만의 영태아)를 포함하여 원재료를 공급하여 태반추출물을 생산하고 있다.

영양상태가 가장 좋은 3개월 된 어미양만을 엄선하고 있다. 

The above basically says the products use sheep's placenta + embryo from 3 month pregnant sheep.

I was planning on making this post the last one about Crebeau's problems, but it looks like I need to make another post because there are more. I will post about the actual stores owned by CJS, and how they promoted and sold the products.