HYBE's sub-label Ador CEO Min Hee-jin sits at a press conference in Seoul, April 25. Yonhap

Amid intensifying feuds between HYBE and its sub-label Ador CEO Min Hee-jin, the monetary value of the 18 percent stake in Ador held by Min may be reduced to about 2.8 billion won ($2 million), from the currently estimated 100 billion won, if Min is found guilty of breach of duty by the courts, industry insiders say.

According to music industry sources on Thursday, the shareholders' agreement signed between HYBE and Min includes a clause stipulating that "HYBE, or a third party designated by HYBE, has the right to purchase (call option) all of the shares held by Min in case Min violates the agreement."

It has been reported that the agreement also states that when HYBE decides to exercise the call option right, the price of a share will be determined by "the lower price of the par value of a share and 70 percent of the fair value of a share."

It means that if the breach of duty on the part of Min is confirmed at court, the price of Ador shares held by Min can be determined at 5,000 won per share, which is the par value — the stock's face value originally stated in a company's corporate charter. In this case, Ador's 18 percent stake, or 573,610 shares held by Min, could shrink to a mere 2.86 billion won, from the currently estimated 100 billion won.

Given that Min reportedly borrowed some 2 billion won from HYBE Chairman Bang Si-hyuk when she acquired the 18 percent stake in Ador at the price of some 1.1 billion won last year, Min might have to leave Ador practically empty-handed, considering the repayment of the debt and the penalties for contract breaches.

HYBE's headquarters in Seoul / Yonhap

Against the backdrop, the key issue of legal battles between the two sides will now be whether the Ador CEO violated duties stipulated in the shareholders' agreement signed between the two parties.

HYBE argued that legal reviews have already confirmed sufficient grounds for Min's breach of duties, and it also discovered many other counts of illegality on the part of the Ador CEO, for which appropriate measures will be taken.

"HYBE has found that this case was meticulously planned by Min to illegally seize Ador's management rights. The audit results show the internal whistleblowing advocated by Min is also a part of the scheme," the entertainment company added.

In response, Min said in a statement released earlier in the day that "the documents presented by HYBE as evidence of an attempt to illegally seize Ador's management rights, is merely the 'imaginative scenarios' amid the ongoing conflicts with HYBE."

She added, "there were no specific plans or actions conducted related to the imaginative ideas."

She also asked HYBE whether it's appropriate to publicly disclose the interim results of its internal audit, which should be handled discreetly.

HYBE revealed last month a document written by Min's side over the past couple of months, which details Min's plan to get away from HYBE's control. The document was obtained from the email of Ador's vice chief, which contained sub-titles of "filing complaints, civil lawsuit actions and media warfare."

Another messenger transcript revealed by HYBE shows that Ador's vice chief suggested a strategy to turn Ador into an empty shell through the exercise of Min's put option in January 2025. The vice chief went on to suggest that they should find financial investors who would be willing to acquire the empty-shelled Ador shares from HYBE, and then, Min could repurchase the Ador shares again, after it's sold by HYBE. Upon hearing the idea, the individual identified as Min responded "great."

The Seoul Central District Court has started conducting hearings regarding HYBE's request to hold a temporary shareholders' meeting to terminate Min from her position. On Apr. 25, the company also filed a complaint against Min and other Ador executives for breach of duties at Yongsan Police Station in Seoul.

Meanwhile, HYBE posted 410.6 billion won in revenue for the first quarter of this year, which is a 12.1 percent drop compared to the same period last year. Quarterly net profit stood at 2.9 billion won, an 87.4 percent plunge year-on-year. The decline is attributed to the decrease in album sales with BTS members all serving in the military, as well as increased initial costs related to the debut of rookie groups including Illit.

The firm expects its earnings to improve from the second quarter, with its key artist groups resuming global activities and BTS member Jin expected to complete his military service in mid June.

The company also apologized to shareholders for the concerns caused by the ongoing feud, vowing to address it with audit findings and improve its multi-label system.