Amidst allegations of an attempt by ADOR CEO Min Hee Jin and some ADOR executives to detach from HYBE and their ensuing audit conflict with HYBE, attention is also drawn to the moves of the group NewJeans.
According to HYBE, on the 22nd, the company initiated an audit of ADOR’s management, including Min and an unnamed executive. The HYBE audit team visited ADOR’s management to recover computer assets and secure in-person statements. The audit was triggered after capturing circumstances where ADOR’s management leaked confidential contracts and induced the sale of ADOR shares owned by HYBE. HYBE also found that the unnamed executive used his position to transfer internal information from HYBE to ADOR.
The industry views these actions by ADOR’s management as an attempt to detach from HYBE and seize control of ADOR, prompting HYBE to respond immediately. After analyzing the computer assets secured today, the HYBE audit team is considering legal action if necessary.
Furthermore, HYBE has requested a shareholders’ meeting against the ADOR board of directors. Along with the request for a shareholders’ meeting, a separate letter was sent demanding Min’s resignation.
If the resignation is accepted, Min will likely leave ADOR, given the current circumstances.
ADOR was established in 2021 with a capital investment of about $12.3 million by Bang Si Hyuk, the chairman of HYBE. Min currently holds 18% of ADOR shares (573,160), making her the second largest shareholder. Last year, HYBE reduced its 100% ownership of ADOR to 80%. Min Hee Jin exercised her call option to purchase an 18% stake in ADOR.
In 2023, ADOR reported revenue of about $84 million, an operating profit of about $25.6 million, and a net profit of about $20.3 million. Since NewJeans is currently the only artist under ADOR, most of the revenue can be attributed to them.
Since their debut in 2022, NewJeans has created a sensation with numerous hit songs and received significant love both domestically and internationally. Although their exact contract duration is not disclosed, the music industry typically signs a 7-year contract after debut, as the standard exclusive contract limits the term to a maximum of 7 years.
Given last year’s revenue and NewJeans’ remaining contract duration, leaving ADOR would likely require a significant penalty unless there is a particular reason. Hence, the prevailing opinion in the music industry is that it would be realistically tricky for NewJeans, currently enjoying peak popularity, to leave ADOR while accepting these terms.
Amidst this, NewJeans is scheduled for a comeback in May, and the industry is watching to see if there will be any disruptions to their schedule. So far, there are no changes to NewJeans’ comeback schedule. However, the internal strife within HYBE casts uncertainty on their future actions.
On the 22nd, Min’s side issued a statement alleging that her dismissal was sought after an artist from HYBE’s label, Be:LIFT Lab, copied NewJeans. Min denied the accusation of management rights theft posed by HYBE’s audit as ridiculous.