The Conflict Between Min Hee-jin and HYBE: ADOR's Independence and Management Dispute

 The Conflict Between Min Hee-jin and HYBE: ADOR's Independence and Management Dispute

Since April 22, 2024, a significant conflict between Min Hee-jin and HYBE has surfaced, creating a substantial stir within the K-pop industry. HYBE has accused Min Hee-jin, the CEO of ADOR, and her management team of attempting to separate ADOR from HYBE LABELS and seize management control. In response, Min Hee-jin and her team have claimed that they only sent a letter to HYBE’s headquarters protesting the new girl group ILLIT from Belift Lab, which they believe is a copy of ADOR’s NewJeans. They argue that this led to a sudden and retaliatory dismissal notice from HYBE. Meanwhile, HYBE, as the major shareholder, has raised suspicions of management control seizure attempts, business secrets leaks, and personnel lobbying against the ADOR management team.

1. Management Rights-Related Issues

Authenticity of Management Rights Usurpation Attempt

HYBE's Claim: HYBE alleges that it has evidence suggesting Min Hee-jin plotted to usurp management rights within ADOR. According to them, discovered documents and conversation records outline concrete plans for management rights usurpation and rights infringement lawsuits. They claim that Min Hee-jin intentionally violated the major shareholder's rights.

Min Hee-jin's Claim: Min Hee-jin's side argues that the responsibility for HYBE's stock price drop should be determined by legal judgment. They contend that the accusation of management rights usurpation is legally baseless, emphasizing that Min Hee-jin legally holds the management rights of ADOR. They stress that it is difficult for charges of embezzlement to be established.

 Embezzlement Charges

HYBE's Claim: HYBE asserts that ADOR's vice president recorded Min Hee-jin's plan to usurp management rights in an official work log, considering this as embezzlement. They highlight that documents and conversation records detail the plan's specifics.

Min Hee-jin's Claim: Min Hee-jin argues that the establishment of embezzlement is challenging. Embezzlement requires the perpetrator to be in a position of managing someone else's affairs, which Min Hee-jin, as the CEO of ADOR, was not violating. They argue her actions were for the benefit of ADOR, not against HYBE’s interests.

Legitimacy of Dismissal

Min Hee-jin's Claim: Min Hee-jin contends that the demand for her dismissal is unlawful. She argues that the request to replace ADOR's board members and CEO is illegal and that the convening of the board of directors is beyond the authorized scope, making the dismissal unjustified.

HYBE's Claim: HYBE argues that it is entitled to dismiss board members through the board of directors and shareholders' meeting. They see the dismissal as justified due to a breakdown in trust, and they maintain that there are no procedural issues.

Controversy Over HYBE's Audit-Related Public Campaign

Min Hee-jin's Claim: Min Hee-jin's side claims that the public release of private KakaoTalk conversations has led to an excessive media campaign. They criticize the unauthorized surveillance and disclosure of private communications and argue that the media campaign has become problematic.

HYBE's Claim: HYBE argues that informal information exchanges between Min Hee-jin and external figures impacted management decisions. They also explain that they made demands for the return of information assets after these were publicly disclosed.

2. Shareholder Agreement Disputes

 Restrictions in the Agreement

Min Hee-jin's Claim: Min Hee-jin's side contends that the non-compete clause and conditions regarding the exercise of the put option in the shareholder agreement are unfavorable. They have requested modifications to the agreement, which HYBE has rejected, leading to heightened conflict.

HYBE's Claim: HYBE describes the non-compete clause as standard and reasonable, arguing that Min Hee-jin's claims are exaggerated. They consider the demands for changes to the agreement as excessive.

3. Artist-Related Issues

NewJeans-ILLIT Similarity Controversy

Min Hee-jin's Claim: Min Hee-jin alleges that ILLIT, a new girl group under HYBE's Belift Lab, copied the concept and choreography of NewJeans. She criticizes the similarities in choreography and concept between ILLIT and NewJeans.

Counterarguments: Some argue that similarities between NewJeans and ILLIT could be a natural occurrence as part of trends, and that such similarities in fashion or style might not necessarily constitute copying or plagiarism.

Additional Context

1. Min Hee-jin's Management Style and Leadership

Min Hee-jin’s Management Approach: As CEO of ADOR, Min Hee-jin has received significant attention for the successful debut and promotional strategies of NewJeans. However, her creative management style has led to conflicts with HYBE’s traditional management approach. Her emphasis on creative independence and decision-making contrasts with HYBE's centralized management.

2. ILLIT and NewJeans Similarity Issue

Choreography and Concept Similarity: Min Hee-jin has raised concerns about the similarities between the choreography and concepts of NewJeans and HYBE’s new girl group ILLIT. Notably, the resemblance between promotional materials such as posters has sparked discussions about potential copying or plagiarism.

3. Shareholder Agreement and Put Option Issues

Put Option Terms: The conditions and pricing of the put option requested by Min Hee-jin are key issues. Min Hee-jin’s dissatisfaction with HYBE’s attempt to lower the put option price has intensified the conflict over contract modifications.

4. Company’s Financial and Investment Issues

Financial Situation: The financial state of ADOR and its investment strategies have impacted the management dispute. HYBE alleges that ADOR’s financial status and investor relations are linked to management rights usurpation plans, while Min Hee-jin’s side claims that HYBE is exaggerating these issues to damage ADOR’s reputation.

5. Board Meeting and Dismissal Procedures

Board Meeting and Dismissal Procedures: HYBE is seeking to convene board meetings and shareholder meetings to address the dismissal of Min Hee-jin, while Min Hee-jin’s side claims these actions are illegal. Disputes over board meetings and dismissal procedures are central to the legal aspects of the conflict.

6. Legal Strategies and Public Campaign

Legal Strategies: The legal strategies of both sides are critical issues. Min Hee-jin’s side has sought court orders to prevent certain board decisions, while HYBE argues that Min Hee-jin’s legal actions are unjustified.

Public Campaign: Both parties are engaged in a public campaign to counter each other’s claims. Min Hee-jin’s side argues that HYBE’s media campaign is excessive, while HYBE highlights Min Hee-jin’s management style and related criticisms in the public domain.

This dispute involves complex elements related to management rights, legal conflicts, contract issues, and public image, which may have significant implications for future legal and corporate decisions.