Min Hee Jin buys investors’ shares, suspected of an attempt to take over
Min Hee Jin
A fierce clash has occurred between HYBE, the largest K-pop agency in South Korea, and its subsidiary label ADOR. ADOR, which owns the girl group NewJeans (photo), is accused of pushing for independence inappropriately. HYBE invoked its audit rights on the 22nd, while ADOR is now countering by claiming that HYBE’s new girl group, ILLIT, has plagiarized NewJeans and caused damage. HYBE stock price, which started the day with a rise but closed down -7.81%, also fell about 3% at the opening on the 23rd, evaporating nearly 1 trillion won ($850 million) in market capitalization in just two trading days. There is growing concern that the activities of NewJeans, valued at about 2 trillion won ($1.7 billion), will be halted.
HYBE has begun auditing CEO Min Hee Jin, her close associate, and others on ADOR’s management team, retrieving digital assets and conducting face-to-face testimonies. HYBE believes CEO Min and others tried to secure a majority stake and take control of ADOR by having friendly investors buy HYBE’s shares.
On the other hand, ADOR countered, “We have officially raised issues about HYBE’s series of actions towards NewJeans, including ILLIT’s plagiarism of NewJeans.”
Rumors of discord between HYBE chairman Bang Si Hyuk and CEO Min have been smoldering for a long time. Although HYBE has gathered its artists together with a focus on its fan platform, Weverse, NewJeans notably uses its app, Phoning, which is considered a clue to the discord.
Public opinion and the media are on high alert for NewJeans’ decision. ADOR stated, “We announced our official position after ample discussion with the members of NewJeans and their legal representatives,” but the public view towards this is unfavorable. This is because ADOR is a company that HYBE has 100% invested in. HYBE owns 80% of the shares and has dominant rights over ADOR and NewJeans.
This incident also triggered a red alert about HYBE’s status. Recently, Hana Securities predicted that ADOR’s corporate value will reach 2 trillion won ($1.7 billion) by 2025-2026. However, if the dispute between the two sides intensifies and the public turns its back, the value of NewJeans and ADOR can only plummet. This will ultimately result in a loss for the major shareholder, HYBE.