The news shocked both the Korean and Japanese entertainment worlds.

Though Nicole Jung, Kang Ji-young and Han Seung-yeon intend to leave the group, they said they will not do so before honoring all current commitments, including a drama/reality show being broadcast on Japanese television.

In a statement released by a firm called Landmark representing the three members, DSP was accused of “forcing the members to perform against their will, insulting their character, and signing various contracts on their behalf without explaining the details” to them.

Some Korean media are speculating that the rift was started by a dispute over the share of advertising deals and royalties.

Kara’s leader, Park Gyuri, will continue on with the group, as will Goo Hara, who initially joined the three malcontents but changed her mind a day after the split was announced. Landmark later released another statement accusing DSP of attempting to “divide” the members by calling each individually.

As with the breakup of the popular Korean boy band TVXQ more than a year ago, the collapse of Kara promises to be a huge financial headache for everyone involved.

The group has five advertising contracts and media are reporting that any penalties for breaking those contracts could cost DSP as much as 10 times what the contracts are worth to the company.

Kim Kwang-soo, CEO of Core Contents Media who has produced a number of K-pop acts, told Korea’s Daily Sports the three members should be banned from the Korean entertainment industry for setting such a bad example for other artists.

“It must have taken a great deal of [DSP’s] passion and love to get the group up to their current level,” he said, “and it breaks my heart to see it all collapse overnight.”

The breakup has received as much attention in Japan as it has in Korea, if not more. While Kara has sparked controversy in their native land for their provocative dance style and image, that style has mostly been accepted without criticism in Japan, where local female singers tend toward the demure and innocent. The implication is that it’s acceptable for female singers, even teenage ones, to act sexy as long as they’re foreigners.

Nevertheless, one of the implications of the breakup is that at least three of the members of Kara resented being forced to convey such an image by DSP.