Ador's former CEO Min Hee-jin, left, and HYBE's Chairperson Bang Si-hyuk / Yonhap
The strife between K-pop powerhouse HYBE and its subsidiary Ador's CEO Min Hee-jin, who is known as NewJeans' producer, is even more heightened as HYBE replaces Min with Kim Ju-young, its former chief human resource officer (CHRO), as Ador's new head.
HYBE announced, Tuesday, that it held a board meeting on the day and appointed Ador's new CEO to take over Min's position, while Min remains as the company's inside director and producer for NewJeans. It explained that Kim, who has expertise in human resources from working in different fields, is expected to take the role of stabilizing and restructuring the internal organization of Ador.
“Ador, internally, will separate production and management divisions. This has been a principle for all other (HYBE) multi-labels, but so far, Ador was the only exception where the CEO oversaw both production and management,” it said in the release.
Kim Ju-young, the new CEO of Ador/ Courtesy of Ador
“(With the recent changes), Ador plans to provide full support for NewJeans' growth and greater success."
However, Min quickly shared her side of the story on the management change, saying that she didn't step down willingly and was fired, which violates the shareholders' agreement she had with the company. The agreement guarantees her a five-year term, of which she has only served two years.
She claimed HYBE's decision also goes against the May 31 court order that prevents HYBE from exercising its voting rights to remove her from the position.
“HYBE claims to have terminated the shareholders' agreement, but this claim has no basis, and CEO Min never acknowledged the termination,” Min's law firm said in the release. “CEO Min was dismissed against her will and did not step down voluntarily. And Ador's board of directors unilaterally notified her that she would be in charge of producing duties."
The parent company soon refuted her claim, saying all the procedures for the board meeting were carried out properly, complying with the law and the company's regulations. It added that Min was present at the meeting through video chat and the decision came after a “thorough discussion” of the best option for NewJeans' and Ador's future.
However on Friday, Min rejected a proposed contract from Ador that would have her continue producing for NewJeans, deeming the terms unreasonable. According to Min, the delegation of duties agreement allows her to produce NewJeans from Tuesday, the day of her dismissal, through Nov. 1. She argues that the contract's short-term nature — just over two months — is impractical given NewJeans' extensive plans, including a world tour in 2025.
Start of conflict between HYBE, Ador
Min, who previously worked at SM Entertainment for about 17 years, is a veteran creative director who took part in visual work for top K-pop stars including Girls' Generation, SHINee, f(x), EXO and Red Velvet, before joining HYBE in 2019 as chief brand officer (CBO).
In 2021, HYBE established its subsidiary label Ador, investing 16.1 billion won into the venture with Min at the helm as CEO. Following the meteoric rise of NewJeans the next year, Min secured a shareholder agreement with HYBE in March 2023, obtaining an 18 percent stake in Ador.
This agreement included a 15 percent put option, allowing her to sell her shares for 13 times the operating profit. Min and HYBE were negotiating to adjust the terms of the agreement later that year after Min requested to raise the price of put options.
NewJeans debuted under Ador in 2022. Courtesy of Ador
The dispute between the parent and subsidiary surfaced when HYBE prompted an emergency audit on Ador on April 22, accusing Min and its management officials of attempting to spin off the firm.
Three days later, HYBE additionally filed a complaint with the police requesting an investigation into Min for breach of trust. “We've confirmed details that a plan to seize management control over Ador was established, under Min's leadership,” it said.
Min held a buzz-making press conference on April 25 in response to HYBE's legal action, denying the allegation. She claimed that HYBE delayed NewJeans' debut, unlike what they promised her, and debuted Le Sserafim as its first girl group, which broke their trust and triggered the conflict.
HYBE's attempts to remove Min as Ador CEO
When HYBE, which holds 80 percent of Ador's shares, requested Ador hold a board meeting to replace management in April, Min refused, filing an injunction to block it from exercising its vote in favor of her dismissal proposal.
The court granted the injunction, leading Min to secure her position at the board meeting on May 31. “It is clear that Min sought ways to weaken HYBE's control over Ador and gain independent control,” the court said in its ruling.
“However, it is difficult to conclude that these actions progressed beyond execution. And while Min's action might be seen as a betrayal of HYBE, it is hard to argue that it constitutes breach of trust."
During the meeting in May, HYBE still carried out its right to replace other management figures, the vice president and executive director, with officials closer to HYBE — CHRO Kim Ju-young, CSO Lee Jae-sang and CFO Lee Kyung-jun.
According to HYBE's half-year business report released on Aug. 19, the company terminated the shareholders' agreement with Min last month and has filed a lawsuit with the court seeking confirmation of the termination.
Flowers are displayed at HYBE headquarters in Yongsan District, Seoul, from BTS fans calling for HYBE to take legal actions to protect the group amid the controversy between the company and its subsidiary label, Ador. Yonhap
The industry sees the swift change in Ador's management will bring positive effects to the company. HYBE's stock price rose about 3 percent to 182,000 won ($136) a day after the new CEO announcement and saw an additional 3 percent rise on Thursday.
“Strengthening the multi-label system by separating the management and producing division of Ador is a positive development,” Kim Min-young, a researcher at Meritz Securities, wrote in the research report.
“If the shareholders' agreement is terminated, the market's fatigue and risks on the multi-label system, which have been highlighted since the beginning of the year, are expected to be alleviated.”
However, she pointed out that the risk is still yet to be fully resolved as further legal disputes may continue between Min and the company.
Defamation, accusations, negative publicity
Amid the legal battles, the media frenzy on both parties continued with various accusations, including leaks of Min's personal messages seeking advice from a shaman on debuting a new group and statements from the parents of NewJeans members on how they felt mistreated by HYBE's head Bang Si-hyuk.
Another allegation emerged when a news report accused Min of poaching trainees from HYBE's label, Source Music, to join NewJeans under Ador. Revealing trainee practice videos, work messenger chat logs and emails between Source Music and Min's office, the news accused Min of purposely delaying the work for the label's debuting group and transferring members to her own label.
Min refuted the accusation, claiming that Source Music intentionally leaked the messages and videos, which violates the copyrights of the members. She claimed that she personally scouted NewJeans members and that Source Music had neglected and mistreated them.
While Min vowed to take legal actions against the news outlet and Source Music for leaking personal records, Source Music also filed a lawsuit last month against Min for defamation, obstruction of business and insult, seeking approximately 500 million won in damages.
NewJeans performs during their first solo concert and fan meeting in Japan, Bunnies Camp 2024 Tokyo Dome, June 27. Yonhap
Where does this put NewJeans?
Throughout the conflict, the group members and their parents have shown relentless support for Min, who has been with the group at every step even before its debut. The members filed a petition in favor of Min during the court injunction in May. Min also revealed its member Danielle's letter, saying “We're always on your side.”
HYBE assertes that the decision for the CEO's replacement was best for NewJeans and will continue its utmost support for the group, which contributed greatly in generating 110 billion won in revenue and 33.5 billion won in profit last year for the label.
This leaves Min with two options in order to stay involved with NewJeans: to accept the producing position at Ador with satisfying conditions or pursue an independent path with NewJeans by terminating the group's contract with Ador, which will cost an enormous termination fee. Should NewJeans choose to end its exclusive contract with Ador, the penalty would be based on the average monthly revenue over the past two years multiplied by the remaining months of the agreement, with costs potentially exceeding 300 billion won.
However, it remains uncertain whether NewJeans can retain the distinctive identity and appeal established by Min, who has been integral to every aspect of the group, from concept and music to collaborations and merchandise.
Music critic Jung Min-jae noted although it's too early to guess how this will affect the group's future actions, the key will be maintaining the group's identity despite the controversy.
“Right now, the public is really tired of hearing about Min and HYBE's situation. So, there are probably many people who stopped following it halfway through. The key now is for NewJeans to maintain the consistency of the group's image before and after the issue as much as possible. Staying consistent is what themselves and the fans would want,” he said.
“Even during the issue, the group's new work, like ‘Supernatural,' saw a good outcome and positive response. So as long as they continue to showcase their own visual style and the work they've been doing, the situation shouldn't change drastically.”