NewJeans / Courtesy of Ador

The Korea Startup Forum, the country's leading startup organization, voiced concerns about the potential investment-related impact following a recent announcement by K-pop girl group NewJeans to terminate its contract with management agency Ador.

In a statement released Monday, the forum described NewJeans' announcement as “a significant case that could seriously undermine the principles of trust and responsibility, which form the foundation of the investment ecosystem.”

“We express our deep concerns that such a situation could undermine the legal stability of the investment environment and threaten the very foundation of the startup ecosystem,” the statement read.

The forum stressed that the girl band's unilateral interpretation and invalidation of its management contracts erode market trust in the fulfillment of investment agreements, which could potentially weaken investor sentiment.

“(The accumulation of) incidents of unilateral contract nullification can significantly dampen investor sentiment, transcending individual agreements to damage trust in Korea's startup ecosystem as a whole,” the statement read, adding that investor sentiment has rapidly weakened following NewJeans' announcement.

During a press conference on Nov. 28, the members of NewJeans said they will terminate their contracts with Ador, a sub-label of HYBE, saying “neither HYBE nor Ador have shown any willingness to improve the situation or accept our demands”

The move comes amid a dispute between Min Hee-jin, former CEO of Ador, and HYBE, after the parent company's board removed Min from her position, citing what it described as her attempts to seize control of Ador.

On Dec. 5, Ador issued a statement revealing that it had filed a lawsuit with the Seoul Central District Court, seeking legal confirmation on the validity of its contracts with NewJeans. The agency asserted that "the contracts cannot be nullified by one side's unilateral demand."