HYBE vs. ADOR: The Power Struggle That’s Shaking Up the K-Pop World
This unique situation between the parent company and its subsidiary label in the history of the domestic entertainment industry is attracting both attention and concern from K-pop fans.
Reports on the 22nd revealed that HYBE initiated an audit of the ADOR management team led by CEO Min Hee Jin. HYBE established its audit team, which visited ADOR’s premises that morning to collect company computer assets and conduct in-person interviews. Furthermore, HYBE confirmed sending a letter to the ADOR board of directors, urging a shareholders’ meeting and the resignation of CEO Min Hee Jin.
The audit questionnaire sent by HYBE to the ADOR management team, including CEO Min Hee Jin, reportedly contains questions about the facts regarding the corruption committed by the ADOR management team. This includes plans to seize control of ADOR, leaks of business secrets, and personnel solicitations.
CEO Min Hee Jin and key members of ADOR’s management team are suspected of discussing plans to leak confidential contracts, encourage the sale of ADOR shares owned by HYBE, and solicit personnel.
HYBE is speculated to have taken action after confirming the circumstances of ADOR’s management control seizure through internal investigations.
HYBE claims that there are circumstances where ADOR received inappropriate external consulting, such as reviewing the sale structure with securities analysts, overseas investment advisory companies, private equity funds (PEF), and venture capital (VC) officials.
A HYBE official revealed, “Attempts to sell the 80% stake in ADOR owned by HYBE to investors friendly to the current ADOR management team have been detected,” and stated that they believed ADOR had a plan to secure management rights and launched an investigation.
The current share structure of ADOR is known to be 80% owned by HYBE and 18% by CEO Min Hee Jin. Last year, CEO Min Hee Jin exercised a call option (the right to buy shares at a set price) to purchase an 18% stake in ADOR, becoming the second-largest shareholder after HYBE.
During the investigation, HYBE reportedly identified Shin Dong Hoon, the deputy representative of ADOR, as the central figure in this incident.
Last year, HYBE replaced all ADOR board members with the Min Hee Jin faction, transforming the initial ADOR board, where HYBE’s key personnel were seated, into a board filled with family members who had sided with CEO Min Hee Jin.
Deputy Representative Shin Dong Hoon has worked on significant projects with CEO Min Hee Jin for several years since his tenure at SM Entertainment. Initially, He was in charge of corporate explanation (IR) in the HYBE finance department and performed listing tasks, but he moved to ADOR earlier this year.
CEO Min Hee Jin describes Deputy Representative Shin Dong Hoon as a human textbook. Within the HYBE organization, Deputy Representative Shin Dong Hoon is called Min Hee Jin’s right arm, showing a strong bond with CEO Min Hee Jin.
Deputy Representative Shin Dong Hoon is suspected of securing core trade secrets, such as HYBE’s financial and contract information, during his tenure at HYBE and using them to establish a plan to secure management rights.
Director Kim Ye Min, also known as a vital Min Hee Jin faction member, has worked on significant projects with CEO Min Hee Jin for several years since his tenure at SM Entertainment.
Director Kim Ye Min, who has been working with CEO Min for the longest time since resigning from SM with CEO Min, is known as Min Hee Jin’s disciple.
CEO Min Hee Jin and Director Kim Ye Min are vital members who incorporated their branding know-how from SM Entertainment into HYBE when the former Big Hit Music was reborn as HYBE in 2021.
Director Kim Na Yeon, who followed Director Kim Ye Min, also resigned from SM Entertainment with CEO Min Hee Jin and moved to HYBE after working with CEO Min Hee Jin since she was a new employee at SM Entertainment. She is famous among K-pop fans as the creator of the term “Min Hee Jin Kid.”
HYBE is publicizing the suspicion that the Min Hee Jin faction, of which they are key members, is attempting to seize control. It was confirmed that ADOR’s board of directors, Min Hee Jin, Shin Dong Hoon, and Kim Ye Min, could hold their board meetings.
An industry insider judged that attempts to dilute shares and change the composition of shares/shareholders would be possible if they tried to attract outside investment. If the board approves, they could take advantage of the fact that outside investment approval is likely.
If the ADOR management team had attracted outside investment, the value of the 80% stake owned by HYBE could have been diluted, leaving HYBE with only the nominal share structure of being the largest shareholder. It appears that they are focusing on this point and conducting an investigation.
CEO Min Hee-jin is known to have stated that the problem arose from ILLIT’s copying of the NewJeans concept.
The girl group ILLIT, which sparked the NewJeans copy controversy, is a new girl group introduced by Belift Lab, a label under HYBE. CEO Min Hee Jin claims that they followed the famous singer NewJeans of ADOR, which she leads, in musical characteristics, visual concepts, etc.
CEO Min Hee Jin stated, “ILLIT is copying NewJeans in all entertainment activities, including hair, makeup, costumes, choreography, photos, videos, and event appearances.” When she raised objections to HYBE, she reportedly countered, saying that HYBE was trying to dismiss her.
She continued, “I can’t understand how a legitimate protest can be an act of seizing control of ADOR,” and pointed out that HYBE, who is casting suspicion on CEO Min Hee Jin for attempting to seize control, is conducting “ridiculous media play.”
CEO Min Hee Jin also stated that she would respond to HYBE’s suspicions with all possible means and methods.
Meanwhile, as suspicions surfaced about the seizure of management rights, HYBE’s stock price plummeted. On the 22nd, HYBE’s stock price closed at 212,500 won ($178.73), down 7.81% from the previous trading day.
As of 4 p.m. on the 23rd, HYBE’s stock price was 210,000 won ($176.67), down 1.18% from the previous day. Since the Min Hee Jin incident broke out, HYBE’s stock price has fallen by about 9%.
Concerns about NewJeans and ILLIT, which are involved in this suspicion, are also being raised. NewJeans’ upcoming return in May could be affected, and the fact that ILLIT, a newcomer who has not debuted for long, is continuing to make noise is raising concerns among K-pop fans.
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