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HYBE released a statement after ADOR CEO Min Hee Jin’s press presentation.
Min Hee Jin revealed HYBE founder Bang Si Hyuk’s text messages to her and more in her last press appearance. Read HYBE’s complete statement on these issues.
“Hello. This is HYBE.
We’d like to clarify ADOR CEO Min Hee Jin’s remarks during an April 25 press conference for shareholder value and IP protection.
1. Claiming the management rights takeover was a joke or banter
Transcripts and work logs document months-long discussions. Long-term casual interaction with third people becomes a plan. The vice president who had the chats is a certified public accountant with corporate governance expertise who handled HYBE’s IPO and many M&As. He has access to all ADOR financial data as a core executive. The vice president recorded the CEO’s ‘ultimately leaving HYBE’ comment in the work log. It’s no joke.
Several documents have been unearthed that assessed the amount that may be acquired by exercising put options, including the time of action and terms like infringement lawsuits, investors, and public opinion fight. Min Hee Jin told the vice president, ‘This will have to be reported as informal discussion.’
2. The notion that money wasn’t enough
CEO Min said she makes 2 billion won ($1,453,721.60 USD). Correctly, her 2023 performance reward is 2 billion won, and her pay and long-term incentives are computed separately. This is the highest wage for HYBE headquarters and Korean subsidiaries employees.
In addition to salary, HYBE offered large stock compensation. Her stocks are so valuable that average people cannot imagine them. However, CEO Min proposed an amount the company could not accept, sinking the negotiations. We perceive this as her justification for management rights independence.
3. The whistleblowing email was not responded to as the audit commenced immediately.
A detailed 6-page A4 response was sent on April 22 at 10:01 a.m., and CEO Min read it at noon the same day. CEO Min persisted in her assertion at the press conference without a response.
The audit was done after internal and external intelligence revealed months-long attempts to seize management rights and leaked confidential corporate papers. It is ludicrous to argue that significant misconduct audit schedules should be announced in advance.
4. No information asset return guidance was provided on the claim.
On April 22 at 10:00AM, we retrieved information assets from [Min Hee Jin’s] Mapo District home and studio as part of the audit. CEO Min did not answer to landline, email, or cell phone calls. We requested information asset return from ADOR’s Vice President Shin after the return period expired on April 23 at 6:00PM. VP Shin said, ‘CEO Min is too busy to do so.’ Min Hee Jin’s assertion that she learned about the information asset return from the media is irresponsible.
The idea that we seized her computer assets so she couldn’t work before NewJeans’ return is false. We give you a new laptop and let you download all your data when we get the returned laptop to keep work going. Other auditees use our new devices.
5. We pledged to debut [NewJeans] as our first girl group.
One reason we replied in detail in the April 22 email to CEO Min. CEO Min likely pretends she did not receive an email since she cannot make provocative and false assertions by reading it. We replied in detail below.
CEO Min is making false assertions based on your skewed view of Source Music’s separation. It’s not because HYBE broke our pledge to launch NewJeans as its first lady group. You insisted on debuting [NewJeans] under your own label and forming a team under your responsibility. HYBE shifted the members to ADOR against Source Music’s opposition and supplied 16 billion won ($11,627,315.20 USD) so NewJeans could debut as you wished. NewJeans’ debut schedule was delayed despite HYBE’s intentions owing to corporate division and contract transfers.
Moreover, you revealed this procedure before. On March 24, 2022, you told a media outlet that your female group project will start in the third quarter of 2022. You said, ‘A hasty debut may only strain young members. I debut in the third quarter of 2022 to avoid rushing everyone.”
6. Claims she was advised not to promote NewJeans at debut
NewJeans’ debut was delayed due to Source Music and CEO Min’s R&R issue, and Source Music’s LE SSERAFIM debuted first. Minimal promotional periods were scheduled because the two groups’ debut schedules were so close together. Additionally, before LE SSERAFIM member Sakura signed with HYBE, articles regarding her ‘transferring to HYBE’ circulated. If we publicized ADOR’s inaugural group as ‘a team made exclusively of rookies,’ Sakura joining Source Music and NewJeans’ composition would be revealed. To safeguard both teams’ news value, we truncated the middle and promoted NewJeans early.
The email also contained our response:
CEO Min’s interview was two months before LE SSERAFIM’s debut (May 22, 2022), so you had plenty of time to promote her new girl group.
Staff members who know how much Source Music and HYBE sacrificed for ADOR’s success disagree with your allegation.
7. That HYBE neglects NewJeans marketing
Our reply to her email addressed this point in detail.
The HYBE Communication Organization is promoting NewJeans hard. Only NewJeans wrote and disseminated 273 news releases last year. The 659 press releases for Big Hit Music, which operated eight teams including BTS, and the 365 for Pledis Entertainment, which operated four teams including Seventeen, make it hard to say ‘we’ve been neglecting promotion of NewJeans only.’ Our PR promoted all labels and artists equally and did their best.
8. Slave contract claim
The shareholder agreement’s non-competition clause requires confidentiality, yet CEO Min highlighted it at the press conference. To avoid unfair competition from a majority shareholder starting a business in the same industry after selling their shares, shareholders require the non-competition clause. This provision is prevalent throughout industries.
She’s not bound forever either. CEO Min can sell her equities starting in November, and she will no longer be subject to the non-competition clause when her job contract expires in November 2026.
When CEO Min says, ‘I can make 100 billion won ($72,692,420 USD) just by staying still,’ and is expected to start a business by next year, it is not a slave contract. People cannot imagine these unusual compensation conditions.
CEO Min’s KakaoTalk communication with confidants states she can execute the put option on January 2, 2025 and ‘leave.’
In December of last year, we replied to CEO Min’s claim that the contract was a slave contract by saying, ‘If the interpretation is ambiguous, we can settle the ambiguous provisions by modifying them, so that there is no issue.’ The priority order of the two clauses about selling stocks was inconsistent. CEO Min stated, ‘I’m not interested in money,’ but remuneration was the main topic of debate.
9. The ESG management claim
Our organization performs ESG management within its capabilities. CEO Min said,’melting photocards is ridiculous.’ The company has worked hard on an eco-friendly album. The company had to spend a lot of time and money to convert the digital album’s plastic to paper and the album box and photo card to biodegradable material. ESG management involves accepting and investing in this. We are encouraging all HYBE labels to release eco-friendly records, although ADOR is the least cooperative, as internal personnel know.
10. There was no conversation about the claim.
HYBE considered shareholder agreement revisions with CEO Min, but his ‘whistleblowing’ inquiry halted the talks. However, HYBE answered honestly to CEO Min’s ‘whistleblowing.’ The audit revealed that CEO Min secretly consulted HYBE’s internal lawyers and accountants on changing the shareholder agreement and raising whistleblowing issues during the shareholder agreement negotiation, and she contacted law firms and institutional investors to discuss management rights takeovers.
11. Shaman is simply a friend accusation
An outsider involved in management, not just a buddy.
Min Hee Jin and the shaman discussed executive stock option numbers, the management takeover structure, potential investors, and their shareholding percentages. Management decisions were dependent on shaman advice. These discussion partners are not acquaintances. The employer is concerned that she is sharing sensitive company information with outsiders who are making judgments and receiving recruiting requests.
12. Why during comeback? According to HYBE, NewJeans are not valued.
NewJeans’ resurgence coincided with CEO Min’s email attacks on the company. According to forensics, CEO Min has been preparing for a public opinion battle since April and torturing the company with noise. We doubt they imagined the corporation would accept an outrageous pay proposal if they pressured it.
CEO Min is threatening the company with artists as hostages. If the compensation request is accepted, it’s good; if not, they’ll use it to end the relationship.
We complied with CEO Min’s requests over time. However, this time we discovered the requests were part of the ‘build-up’ process to take over management, thus we had to audit to safeguard the multi-label’s value regardless of timeliness. Because we care about the artist’s value, we asked her not to discuss her in press conferences and interviews.
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