"They planned and executed a hostile takeover" (HYBE) vs "These are baseless and false claims" (Min Hee-jin) Once again, HYBE and ADOR's CEO Min Hee-jin are at odds. Min claims that HYBE's allegations are distorted.
On May 2nd, she refuted 9 claims through a press release.Previously, HYBE had released a 12-point rebuttal.
On April 26th, they countered Min's 2-hour press conference point by point, clarifying issues ranging from the hostile takeover attempt to slave contracts and controversies surrounding NewJeans' debut.
The following is a back-and-forth of rebuttals between Min Hee-jin, HYBE, and Min Hee-jin.
· Hostile takeover: a joke or a plan?
HYBE:
Records spanning several months with the same objective can be found in chat logs and work journals.
A casual conversation is no longer just that when it involves third parties over an extended period; it becomes a plan and its execution.
Moreover, the executive Min spoke with is a certified public accountant with expertise in corporate governance who has handled HYBE's IPO and numerous M&As.
They are a key executive at ADOR with access to all financial information.
This executive even wrote in their work journal that the ultimate goal was to"get out."
This cannot be dismissed as a joke.Documents have been discovered specifying the amount obtainable through a put option, the timing of actions, and terms like shareholder lawsuits, investors, and media campaigns.
These cannot be brushed off as a joke just because Min instructed the executive to "treat this as a casual conversation."
Min Hee-jin:
HYBE's alleged "hostile takeover" is a baseless and false claim.
The materials presented as evidence were not intended for a take over but were "hypotheticals" brought up amidst ongoing conflicts with HYBE.
I want to be clear that there were no concrete plans or attempts related to this.As the audit began and negative media coverage intensified, the concerned executive visited HYBE's key management, asking them to stop the one-sided media campaign.
However, HYBE's executives pressured the executive to cooperate, saying, "If you're sued, you'll have to bear the damages as a working-level employee," and "Think of your family."
They psychologically pressured the executive into signing a consent form for information disclosure.
The next day, the executive's KakaoTalk messages were disclosed to the media. This is a serious violation of privacy and human rights.
Recently, when Min Hee-jin's legal representative visited the YongsanPolice Station to submit a power of attorney, they confirmed that the executivewho authored the document was excluded from the list of the accused.
HYBE maliciouslypieced together the contents of the conversations without considering the fullcontext, portraying it as if the original purpose was a hostile takeover, andintentionally reported it extensively to the media.
Min Hee-jin's comment abouttreating it as a casual conversation was also taken out of context and splicedtogether.
· Was the financial compensation a redherring?
HYBE:
Min claimed her "annual salary was 2 billion won." More precisely, her incentive for 2023 performance was 2 billion won, with her base salary and long-term incentives set separately.
This puts her at the top of the salary rankings among HYBE headquarters and Korean subsidiary employees by awide margin.In addition to her salary, HYBE provided substantial stock compensation.
The value of the stocks is so large that it's hard for the average person to fathom.
Nevertheless, Min proposed an amount the company couldn't possibly accept, leading the negotiations to a deadlock.
We believe this process was an attempt to justify her independence from the company.
Min Hee-jin:
First of all, during the press conference, Min Hee-jin stated that her"incentive," not her annual salary, was 2 billion won.
This wascompensation for achieving 33.5 billion won in operating profit within two years of establishing ADOR.
As mentioned in the press conference, the issueraised regarding the incentive calculation was not the amount itself but the lack of transparency in the criteria and decision-making process for determining the incentive.
Min Hee-jin felt that HYBE's incentive determination criteria were unclear and lacked a clear explanation of the calculation process.
Despite these facts about the incentive, HYBE is attempting to distortthe situation and create a false narrative that Min Hee-jin is driven byfinancial greed by mentioning her annual salary, incentives, and stock compensation.
This can only be seen as an attempt to paint her in a negative light.
Min Hee-jin sent a whistleblowing email.
Whatresponse did (HYBE) send, and how did they conduct the audit?
HYBE:
We sent adetailed 6-page A4 response at 10:01 a.m. on April 22nd. We've confirmed that Min read the reply on the same day around noon.
However, Min repeatedly claims in her statement and press conference that "there was no response."
The audit was conducted after learning about the months-long attempt to seize control of the company through internal and external information and confirming the leak of confidential business documents.
It's absurd to demand prior notice of an audit schedule for a serious misconduct case.
Min Hee-jin:
On the morning of April 22nd, CEO Park Ji-won allegedly replied to ADOR's whistle blowing email.
At the same time, HYBE began the iraudit by confiscating the executive's laptop.
They also sent an official letter demanding Min's resignation and a shareholders' meeting.
Then, just a few hours later, news articles were published one after another, reporting that HYBE had exercised its right to audit ADOR's executives.
The following day, articles attacking Min Hee-jin's character continued to be released, as if it were alive broadcast. I'd like to ask
HYBE:
what kind of response did you provide to Min Hee-jin's whistle blowing email?
I also want to ask: what kind of listed company openly discusses what should be a confidential audit, even editing unverified content and reporting it in real-time?
Especially when an artist under their subsidiary label was about to make a comeback.This exercise of the right to audit is seriously hindering the work of Min Hee-jin and ADOR employees, who were working around the clock in preparation for NewJeans'comeback.
HYBE claims that they're providing new laptops as soon as the old ones are returned and downloading existing data to ensure work isn't disrupted,but this isn't true. The executives' laptops were confiscated without even giving them time to download their existing work files. The confiscation process was also unreasonable.
· Was NewJeans supposed to debut as HYBE'sfirst girl group?
HYBE:
We already provided a detailed answer to this in the email sent to Min on the 22nd.
Our response was as follows: The reason NewJeans didn't become HYBE's first girl group wasn't that HYBE broke its promise.
At the time, Min strongly insisted on taking full responsibility for creating the team and debuting them under her own separate label.
Respecting Min's opinion,HYBE transferred the members to ADOR despite Source Musik's objections and provided 16billion won in funding, allowing Min to debut NewJeans in the way she wanted.In this process, the company had to be split, and contracts had to be transferred, inevitably delaying NewJeans' debut schedule regardless of HYBE's intentions.
Min herself even mentioned this process before.
In an interview witha media outlet on March 24, 2022, Min directly announced that the girl groupproject was proceeding under her plan and that the launch was scheduled for the third quarter of 2022.
She even answered, "A rushed debut would inevitably put a lot of pressure on the young members.
I don't want to make everyone anxious, so I set the third quarter of 2022 as a reasonable launch time.
Min Hee-jin:
From the "Plus Global Audition," HYBE had already publicly stated that NewJeans was Min Hee-jin's girl group and HYBE's first girl group.
This is a fact that NewJeans' parents and ADOR's executives at the time all remember as witnesses.
In the end, with the recruitment of Sakura and Kim Chae-won, Le Sserafim became HYBE's first girl group, revealing that HYBE had not kept its promise of NewJeans being "HYBE's first girl group."
Despite this, HYBE is not hesitating to make false claims.
At the time, Min Hee-jin asked to establish ADOR while giving up her stake, and upon its establishment, she endured various disputes to transfer the NewJeans members to ADOR for their debut.
Despite these truths about NewJeans' debut process, it's deplorable that HYBE continues to lie, claiming,
"The debut schedule was inevitably delayed regardless of HYBE's intentions due to the company split and contract transfers."
· Did HYBE prevent NewJeans' promotion during Le Sserafim's debut?
HYBE:
Due to the R&R dispute between Source Musik and Min,NewJeans' debut schedule was pushed back, resulting in Source Musik's Le Sserafimdebuting first. Since the two teams' debut timings were close to each other, wedecided to set a minimum promotional period to ensure sufficient time for eachteam's promotions.
Moreover, even before Sakura's contract with HYBE, articles about her "transferring to HYBE" were pouring out.
In this situation,if ADOR's debut team was described as a "team composed only of new members," there was a risk that the fact that Sakura was joining Source Musik and information about NewJeans' member composition would be exposed together.
We made the request to protect both teams' news value, and even then, we shortened the period midway to start NewJeans' promotions.
Min Hee-jin:
HYBE claims there was a concern that revealing ADOR's debut team as a "team composed only of new members" would be related to Sakura joining Source Musik and expose information about NewJeans' member composition.
However, this is not only inconsistent with the facts but also illogical.
It's not explained how stating that ADOR's debut team is "composed only of new members" is related to Sakura joining Source Musik or how the exposure of ADOR's debut member composition would be a problem.
HYBE made excuses, saying,
"Since the two teams' debut timings were close to each other, we decided to set a minimum promotional period to ensure sufficient time for each team's promotions."
However, there was no such agreement in reality.
At the time, HYBE wanted to create confusion in the market that Le Sserafim might be Min Hee-jin's girl group.
As a result, CEO Park Ji-won blatantly asked Min Hee-jin via phone and SNS not to promote NewJeans.
This can be confirmed through SNS chat records between CEO ParkJi-won and Min Hee-jin.
· HYBE claimed that Min Hee-jin's contract wasnot a slave contract.
Then was the contract reasonable?
HYBE:
It's not true that she's bound forever.
Min can sell her shares starting this November, and if she does, her non-compete clause won't apply after her employment contract with usexpires in November 2026.
The terms guaranteeing a large sum that Min herself described as "earning 100 billion won by doing nothing" and allowing her to cash out and start a business in two years cannot be called a slave contract by any means.
It's a staggeringly generous compensation package that ordinary people can't even imagine.In fact, even in Min's KakaoTalk conversations with her close aides, there's a mention of her exercising a put option and exiting on January 2, 2025.Regarding the stock sale clause in the contract that Min claims to be a slave contract, there was a difference in interpretation of the priority between the two clauses. We had already sent are sponse in December of last year, stating,
"If the interpretation is ambiguous, we will revise the ambiguous clauses to resolve the issue.
"Although Min said she was "not interested in money," the core issue that triggered the discussion was the size of her compensation.
Min Hee-jin:
Min Hee-jin is not denying the necessity of a non-compete clause itself. As a CEO of a company in the entertainment business, she is well aware that engaging in a competing business may be prohibited during the tenure and for a certain period afterward.
However, the scope of the non-compete business and theduration must be reasonable, which is not the case in the current shareholders'agreement.Contrary to the official statement on April 25th, HYBE's rebuttal released to the entire press on April 26th shifted the responsibility of disclosing the shareholders' agreement to Min Hee-jin and refuted it by revealing parts of the content.
The irrationality of the current shareholders' agreement lies in the fact that Min Hee-jin can only be free from the non-compete clause when sheno longer holds any shares, and it's only natural to want to resolve this unfairness.
HYBE claims that in December of last year, they sent a response saying, "There was a difference in interpretation regarding the stock sale clauses in the contract, and we will resolve any ambiguous clauses."
However, the content is not ambiguous to any legal professional, and Min Hee-jin must continue to bear the non-compete obligation until she disposes of all her shares with HYBE's consent. Although they claim to have sent a response in December of last year about resolving ambiguous clauses, it wasn't untilmid-March of this year that a revised proposal containing the relevant content was received.
· Was there ademand for put options and stock options behind the HYBE-Min Hee-jin conflict?
(From a follow-up report on the shareholders' agreement)
HYBE:
In December of last year, Min Hee-jin demanded an increase in the put option multiple for her ADOR shares from 13 times to 30 times.
In the original contract, HYBE set the put option exercise price for Min's side as the value obtained by applying 13times the average operating profit of the last two years and dividing it by thetotal number of issued shares.
If Min exercises the put option under these terms, it would amount to approximately 100 billion won based on the current standard.
(JoongAng Ilbo report)It has been confirmed that the conflict between HYBE and ADOR's CEO Min Hee-jin stemmed from stock options.
HYBE granted stock options to Min when ADOR was established, but Min's side raised issues that the stock options were too small and the tax rate was too high, making it less profitable. In response, HYBE compromised by selling shares at a low price instead of granting stock options.
Nevertheless, the conflict was not resolved,according to industry insiders. (Chosun Biz exclusive report)Min's obligatory employment period is 5 years from the date of ADOR's establishment (November 2021) until November 2026.
(HYBE) proposed extending it by 3 years to 8 years(2029) and adjusting the put option exercise to a later date than the end of this year. However, Min, whose goal was to ease the non-compete clause,rejected this proposal.
Previously, according to the shareholders' agreement,even if Min held put options for her entire stake, she was bound by anon-compete clause as long as she served as the CEO or an inside director.(Korea Economic Daily exclusive report)
Min Hee-jin:
After HYBE's rebuttal, various follow-up reports confirmed by HYBE through the media are rife with speculation and distortion regarding the shareholders' agreement.
I would like to clarify to prevent further misunderstandings.Regarding the put option, HYBE is misleading people by claiming that Min Hee-jin argued for a multiple of 30, as if the current conflict arose from financial motives.
However, the multiple of30 was one of the proposals made during the process of amending the shareholders' agreement, which had various unreasonable elements.
It reflected the future value of producing a boy group, and it was not a high-priority item in the negotiations.Moreover, when the stock purchase agreement and shareholders' agreement were signed in March of last year, HYBE additionally promised Min Hee-jin 10% of ADOR's shares as stock options.
However, upon seeking legal advice, it was found that stock options cannot be granted to Min Hee-jin, who is a major shareholder, under the Commercial Act.
These stock options were not requested by Min Hee-jin but were proposed by HYBE.
Min Hee-jin couldn't shake the feeling that HYBE had deceived her.
It was a matter of "trust."HYBE claims they proposed releasing Min Hee-jin from her non-compete obligation, but she rejected it. However, this is not true. HYBE proposed that Min Hee-jin should be obliged to work for 8 years, bear anon-compete obligation for 1 year after resignation, and exercise the put option in stages according to that period.
However, during the negotiations forthe shareholders' agreement, the AILEE-related controversy erupted, leading tothe current situation. Min Hee-jin has not expressed any position regarding HYBE's proposal.
It is not true that she expressed a refusal.
. The fact that the shaman is just an acquaintance
HYBE:
An external figure who is deeply involved in overall management cannot be considered a mere friend.
In the course of the conversations, undisclosed information such as the number of stock options for an unregistered executive, names of potential investors, and the structure of the hostile takeover with the share holding ratio of each investor was shared.
Various management decisions were made based on the shaman's suggestions.
Such a conversation partner cannot be regarded as a mere acquaintance.
The company takes it seriously that important corporate information was recklessly exposed to an outsider who is not a company-related person, that they intervened in decision-making, and that job requests were also received.
Min Hee-jin:
The success of NewJeans and the remarkable performance achieved by ADOR in a short period of time are based on rational management decisions.
These claims seem to be HYBE's attempt to discredit and deny ADOR's success by weaving this narrative.
ADOR's revenue and operating profit come from preventing unnecessary spending, efficiently managing the budget, and simultaneously working to enhance the brand image and increase its value.
If it were possible as HYBE claims, why would Min Hee-jin and the ADOR team be working tirelessly around the clock?It's disappointing that HYBE, a company that should be at the forefront of K-pop, is resorting to framing the issue with irrelevant personal attacks that aren't even worth addressing. What's worse is that they released this right before Min Hee-jin's press conference.
. Hasn't HYBE cherished NewJeans?
HYBE:
It was Min's side who started attacking the company via email around NewJeans' comeback.
The data secured through forensics includes records of Min's instructions to prepare for a media campaign from April and records of harassing the company by creating noise.
I'd like to ask if they thought the company would accept their unreasonable compensation demands if they pressured the company during this period. It is Min who is actually holding the artists hostage and threatening the company.
If the compensation proposal is accepted, great, and if not, they seem to be trying to use it as an excuse to end the relationship.
Our company has accommodated and compromised with Min's repeated demands over the years.
However, this time, we learned that these demands were part of a so-called "build-up" process for a hostile takeover.
Regardless of timing, we had no choice but to launch an audit to protect the value of our multi-label system.
The reason we've repeatedly suggested not mentioning the artists in press conferences and interviews is that we value the artists.
Min Hee-jin:
On April 22nd, it was HYBE who abruptly announced the audit to the media before its results were even out.
They made claims of an impossible "hostile takeover" without concrete evidence and brought up this issue ahead of NewJeans' comeback without even attempting to hear ADOR's internal position.
HYBE claims they suggested "not mentioning the artists."
If they judged that openly attacking CEO Min Hee-jin and ADOR, an issue that could have been quietly resolved internally, would not affect NewJeans' brand value, this is a sophistry to cover up their own wrong business judgment, demonstrating a complete lack of understanding of label management.
On April 16th, Min Hee-jin sent an internal whistleblowing email, pointing out various issues and stating,
"HYBE lacks the preparation, understanding, and attitude for a multi-label system." It was a frank statement based on the guidelines proposed by Chairman Bang Si-hyuk to "voice dissent and opinions even if it's difficult when facing industry irregularities and irrationalities." However, it came back as the current extreme situation with claims of "breach of trust."
Now and in the future, ADOR will do its utmost to support NewJeans' activities.
If HYBE truly wants to protect IP as they claim and genuinely considers the interests of shareholders, they should stop their unconvincing black propaganda and show common sense by supporting ADOR to fully focus on creation.
