HYBE declares war against Min Heejin
HYBE declared war on Ador CEO Min Heejin, who raised New Jeans. HYBE’s stock price has plunged to the level of YG Entertainment’s market cap as it is known that the current Ador executives, including CEO Min Heejin, are questioned by HYBE and demanded its resignation.
According to a high-ranking HYBE official on the 22nd, HYBE recently sent an audit questionnaire to Ador CEO Min Heejin and Deputy CEO A and B. The questionnaire reportedly contains circumstantial evidence that these Adore executives conspired to take over management control, suspicions of external consulting, and irregularities in hiring personnel.
Previous article about the issue, CLICK HERE.
Summary of the controversy
Putting together the stories of the officials, HYBEbelieves that CEO Min Heejin and other executives of Ador have been working to take over the management rights of Ador from HYBE and become independent. Ador, the agency of New Jeans, is 80% owned by HYBE and 20% by the current management, including CEO Min Heejin.
HYBE believes that Ador management has been preparing to secure management rights by selling its stake in HYBE to investors who are friendly to CEO Min Heejin and other insiders.
To this end, it is understood that A, who was in HYBE’s finance team, moved to Ador’s deputy representative in January and stole various data to secure Ador’s management rights, including various financial information and contract information. HYBE is also said to have secured information that the current management, including CEO Min Heejin, received advice on the sale structure from various private equity funds, venture capital, and law firms to secure management rights.
In addition, according to the official, HYBE also found out that Min Heejin was convincing New Jeans’ parents to follow them.
For this reason, HYBE demanded CEO Min Heejin to resign and demanded a general shareholders’ meeting be convened against the board of directors of Ador. The move is aimed at holding the current management accountable and appointing additional directors from HYBE.
However, it is uncertain whether the shareholders’ meeting will be held as HYBE wishes. The board of directors needs to make a decision on the shareholders’ meeting, but the current board members are on the side of Min Hee-jin. Therefore, HYBE plans to file an injunction request with the court to hold a shareholders’ meeting as the largest shareholder if the board of directors of Ador does not comply with the meeting. In this case, it is believed that it will take about two months.
What would happen in future?
As HYBE, Ador’s largest shareholder, has made up its mind, it is unclear whether CEO Min Hee Jin will be able to continue to control Ador. If CEO Min does not step down from her position as HYBE demanded, a lawsuit will eventually be inevitable for the current management, including HYBE and CEO Min. If there is a lawsuit, CEO Min will have to be charged from the representative position as HYBE is Ador’s largest shareholder. In the process, if CEO Min files a lawsuit for unfair dismissal, the lawsuit may be prolonged.
Since the comeback of Ador’s one and only group, New Jeans, is in May and the Tokyo performance in Japan is scheduled, it is unclear how the confrontation between HYBE and Min Hee Jin will affect it.
New Jeans was influenced much by Min Hee-jin, so attention is focusing on what kind of moves New Jeans will take in the future. Since New Jeans has an exclusive contract with Ador, in principle, there will be no change in its affiliation even if the current management, including CEO Min Hee-jin, leaves Ador. When Min and others left, another representative can take office and lead Ador.
However, if Min Hee-jin leaves Ador and New Jeans follows their creator, the situation will become complicated. New Jeans could file an injunction against Ador to terminate its exclusive contract just like Fifty Fifty. Since current Ador executives including Min Hee-jin may have detailed information on New Jeans contracts and other businesses, HYBE’s advantages and disadvantages are unknown if the lawsuit proceeds.
The current management, including CEO Min Hee-jin, has yet to announce its position on HYBE determination. Min Hee Jin has remained silent on the call from the news outlets.
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