ADOR CEO behind NewJeans stays with HYBE after court win

A legal battle between South Korea’s entertainment powerhouse HYBE Co. and the chief of its sublabel ADOR will likely drag on as the internationally popular girl group NewJeans label head has won court approval for her injunction to stop the parent company’s attempt to oust her. 

The Seoul Central District Court on Thursday upheld the injunction filed by Min Hee-jin, chief executive officer of ADOR, to prevent HYBE from using its voting rights in the upcoming extraordinary shareholders’ meeting on Friday.

“The evidence submitted to date do not sufficiently establish HYBE’s alleged grounds for (Min’s) dismissal,” the court ruled.

The court’s decision means that HYBE can’t immediately remove Min despite its 80% stake in ADOR and Min, with an 18% stake, will stay with ADOR to continue managing NewJeans, which has emerged as a K-pop sensation in the absence of BTS managed by another label under HYBE.

The verdict comes as a surprise a day before an ADOR shareholders’ meeting, during which HYBE was widely anticipated to replace Min as CEO over a suspected breach of trust.

HYBE with multiple labels including ADOR kicked off an unexpected audit into Min and filed a breach of trust complaint against her last month, accusing the ADOR CEO of plotting to take over the label and NewJeans.

Min has strongly refuted the allegations and counterattacked the parent led by Chairman Bang Si-hyuk with the accusation that Bang is punishing her for calling ILLIT, another new girl group from another HYBE label, a NewJeans’ copycat.

HYBE held an ADOR board meeting on April 30 to fire Min based on the audit results, but she did not attend. After the failed attempt to sack Min, HYBE called an extraordinary shareholders’ meeting on May 31 to vote on her dismissal.

In response, Min sought a court injunction to prevent HYBE from exercising its voting rights to dismiss her as ADOR CEO during the shareholders’ session, citing the protection of ADOR artists and its corporate value.

NEED TO FIND MORE EVIDENCE

HYBE is expected to focus on gathering new evidence to prove Min’s alleged breach of trust to call for another shareholders’ meeting to oust Min.

The police are investigating the breach of trust case against Min and could come up with a different conclusion from the court.

The Seoul court said that Min had discussed measures to leave HYBE with ADOR but has not carried out any action, which is an act of betrayal but does not constitute a breach of trust.

But if the police find any evidence indicating that Min was trying to carry out a coup, she could be punished for attempted criminal breach of trust.

According to the shareholders’ agreement signed between Min and HYBE, Min can exercise put options to sell about 100 billion won ($73 million) worth of ADOR shares.

But if she is found guilty of breach of trust, she must unload her stakes for a mere 3 billion won based on their face value.

UNCERTAINTY REMAINS

Following the courting ruling, uncertainty will continue to haunt HYBE for a while as the two parties have no intention of backing down from their stance.

After the court ruling, Min’s legal representative Sejong disclosed the details of the court decision in a statement, saying that if HYBE goes through with its termination of Min, as well as other two ADOR executives, in violation of the ruling, the company will be liable to forfeit 20 billion won to her.

HYBE said it will abide by the court’s order by not exercising its voting rights at the shareholders’ meeting tomorrow.

But it heralded follow-up legal measures to penalize Min’s pursuit of taking control of ADOR as an independent agency, which was defined as an act of betrayal by the court.

HYBE shares on Thursday closed up 2.4% at 204,000 won.

Write to Ji-Eun Ha at hazzys@hankyung.com

Sookyung Seo edited this article.