Navigating the HYBE-ADOR Legal Battle: From the Court Injunction to the Second Press Conference
HYBE Corporation Ltd. and its subsidiary ADOR continue to be in an ongoing legal dispute, one that has spanned over a month so far. What started on April 22 as an audit into ADOR CEO Min Heejin’s alleged plans to separate the subsidiary from HYBE has now led into other issues such as alleged harassment, defamation, and embezzlement. The Kraze initially covered the first part of this issue, detailing the events up until May 2. This follow-up will cover the events following until May 31.
Investigation into HYBE Sajaegi Allegations
On May 4, the Ministry of Culture, Sports, and Tourism announced they will order an investigation into HYBE’s sajaegi allegations. In late April, the Kyunghyang Shinmun uncovered the results of a court case accusing HYBE of sajaegi for BTS back in 2017. The ministry said they received a petition to investigate the matter.
In the 2017 ruling, the court ordered a year sentence to an individual who told officials that HYBE participated in “hoarding marketing” — sajaegi, the bulk purchasing of an artist’s own albums for chart manipulation, something illegal under the Music Industry Promotion Act. These events of sajaegi allegedly occurred in 2015.
The petition requesting the investigation also asked to revoke the Order of Cultural Merit, which BTS received in October 2018. The government awards the Order of Cultural Merit to individuals who promote South Korean cultural assets, such as art, “across the world.” Obtaining the Order of Cultural Merit allows holders to apply for the postponement of military enlistment.
Min Heejin’s Court Injunction Filing
On May 7, Min filed for a court injunction to stop HYBE from “exercising its rights as the 80 percent owner of ADOR” during the HYBE shareholders’ meeting, scheduled for May 31. Shin & Kim law firm stated that HYBE intended to fire her at the upcoming shareholders’ meeting, a move that violated the “shareholders’ contract” between Min and the company. The next day, Seoul District Court confirmed they would look into the injunction application on May 17.
ADOR’s Board Meeting Results and Additional Audit of ADOR Staff
Following ADOR’s board meeting on May 10, ADOR confirmed they will hold its shareholders’ meeting on May 31. Shareholders will vote “on whether or not to dismiss” Min from her position. The injunction she previously filed relates to this decision at the shareholders’ meeting.
According to the Korea Times, that same day ADOR said that HYBE “mistreated and harassed” an ADOR employee due to a separate “illegal” auditing process. This audit, separate from the one conducted against Min in April, focused on HYBE asking for access to an ADOR styling director’s laptop and cell phone. The audit allegedly lasted five hours on May 9, going over work hours into the next day. It investigated this director’s suspected embezzlement, as the individual received “payments from outside advertisers instead of incentives from ADOR.” Though ADOR said such payment happens as a “common industry custom,” HYBE questioned the validity.
HYBE also addressed the audit’s legality, saying that the auditee willingly consented and that everything happened under a “non-coercive atmosphere.” On May 13, HYBE disclosed the KakaoTalk messages between Min and the styling director. Both HYBE and ADOR threatened legal action against each other for defamation. HYBE said ADOR’s accusations of coercion prompted them to pursue “all possible civil and criminal actions.”
The Letter to HYBE From NewJeans’s Parents
On May 13, Ilgan Sports reported that parents of the NewJeans members emailed HYBE in March about their concerns. In the letter, dated March 31, the parents express disappointment towards HYBE and BELIFT LAB for the alleged similarities between ILLIT and NewJeans. In the Ilgan Sports report, translated by Soompi, the parents said:
They wanted HYBE and BELIFT LAB to “clarify their intentions” between NewJeans’s and ILLIT’s alleged similarities.
That HYBE founder Bang Sihyuk does not properly acknowledge the NewJeans members during in-person encounters at the company.
They say NewJeans’s unfair treatment is hardly new: they cite HYBE’s original promise to the members that they would debut as the first HYBE girl group, during their initial time signed to Source Music.
They worry about how “HYBE will exploit NewJeans in the future,” saying that “it will be difficult to restore [their] broken trust” in the company.
They question HYBE’s ethics in this continued treatment, requesting that Min “take [preventative] measures” towards further infringement from HYBE and BELIFT LAB’s infringement on NewJeans’s “brand value.”
HYBE responded to the report, saying that Min and ADOR vice president “L” wrote the email, not the parents. HYBE suggested that Min used the parents in the email because doing so herself would breach the shareholders’ agreement.
The Public Hearing for Min Heejin’s Court Injunction
On May 17, the public court hearing for Min Heejin’s injunction occurred. She aimed to prevent HYBE from dismissing her at the May 31 ADOR shareholders’ meeting. Both HYBE and Min were required to submit additional evidence supporting their case by May 24.
Some of the points made:
Shin & Kim, Min’s legal representatives, said that her dismissal would cause “irreparable” damage to many individuals involved, including NewJeans and HYBE.
Kim & Chang, HYBE’s legal representatives, said Min had been “gaslighting the NewJeans members.” They added that HYBE said “[Min] shows no genuine interest in the protection of the artists … instead, she uses NewJeans members as shields to protect herself.”
In addition, Min also accused HYBE founder Bang Sihyuk of sajaegi during the release of NewJeans’s second EP Get Up in July 2023. According to her, Bang asked Min to inflate these sales by 100,000 units to beat aespa’s record. Min rejected his proposal. At Min’s April 25 press conference, she revealed KakaoTalk messages between her and Bang where he asked her to “crush aespa.”
More KakaoTalk Messages Come to Light
During the hearing, HYBE also revealed Min’s KakaoTalk messages which appeared to show her meeting officials at Naver and Dunamu. She allegedly met these two major partners of HYBE’s in hopes to get them to purchase HYBE’s ADOR shares. Dunamu is HYBE’s third largest shareholder with 5.53 percent stake in the company. The partnership created the non-fungible token company Levvels in 2022, in hopes to launch blockchain projects for their artists. According to the Chosun Daily, Naver and Dunamu confirmed to HYBE the meeting happened.
After the hearing, journalist-turned-YouTuber Lee Jinho revealed more KakaoTalk messages between Min and the ADOR vice president on a YouTube stream. In these messages, Min appeared to talk about the NewJeans members as “miserable elementary schoolers,” and described their weight as “getting fat like a pig.” Lee said the messages were edited but used the exact same terminology that Min wrote.
NewJeans’s Petitions and Min Heejin’s Response to the KakaoTalk Messages
NewJeans’ parents and all five members submitted petition letters to stop HYBE from dismissing Min. Entertainment lawyer Kang Jinseok, hired by the parents, helped them file their letters of support three days before the hearing. He also helped the NewJeans members file theirs on the day of the hearing. Kang specializes in disputes regarding celebrities’ “exclusive contracts.”
On May 19, Min addressed both KakaoTalk situations with NewJeans and the meeting with Naver and Dunamu officials. In reference to the NewJeans conversation, she said the messages shown were “randomly edited here and there.” “It is not something that people who don’t know me, how I make jokes or who I am as a person will be able to judge,” she said. As for meeting with Naver and Dunamu officials, Min said the meeting happened as a “private dinner” arranged by an acquaintance who did not alert her prior about the attendees.
Copyright Law, Defamation Suit, and CEO Talks
BELIFT LAB, ILLIT’s company, sued Min for defamation on May 22. They denied Min’s allegation that ILLIT plagiarized NewJeans, saying “we have submitted evidence to the judicial authorities to prove that the allegations are untrue and we will clarify the truth through legal procedures.” TV Chosun reported a few days earlier that the South Korean government aims to create a choreography copyright-related law in response to this controversy. While copyrighting choreography exists in South Korea, the current law lacks strict guidelines and a distinction from theater work.
On May 23, HYBE denied reports that the company selected HYBE Chief Human Resources Officer Kim Juyoung, Chief Strategy Officer Lee Jaesang, and Chief Financial Officer Lee Kyungjun as potential replacements as ADOR CEO.
Petitions from HYBE Staff and NewJeans’s Fans
On May 24, NewJeans came back with the single album How Sweet. Bunnies, NewJeans’s fans, were busy on multiple fronts supporting the group. Min’s lawyer filed a petition started by Bunnies to Seoul Central District Court. The petition garnered 10,000 signatures in less than 24 hours. HYBE also received petitions signed by prominent staff including Pledis Entertainment CEO Han Sungsoo, Source Music CEO So Sungjin, BTS and LE SSERAFIM’s creative director Kim Sunghyun, and BTS’s producer Pdogg.
The Court’s Injunction Ruling and ADOR Directors’s Dismissal
Seoul Central District Court accepted Min’s temporary injunction on May 30, restricting HYBE from firing her at the shareholders’ meeting on May 31. The court said that while there is evidence that she planned ways to remove NewJeans from “HYBE’s control” or to pressure HYBE to sell “its stake in ADOR,” but that does not constitute as a breach of trust. They point to inconclusive evidence that these ideas went further than just seeking methods. They say it could be seen as “betrayal,” but not “a breach of trust.”
This injunction stemmed from a clause within the shareholders’ contract between Min and HYBE which stated:
HYBE must “exercise its voting rights at ADOR’s shareholders’ meetings to maintain Min’s positions as CEO and inside director for five years.
This remains active from the establishment of ADOR on November 2, 2021.
After the verdict, ADOR said that “HYBE also lacks evidence to dismiss” ADOR directors vice president Shin and creative director Kim. However, HYBE fired both directors after the shareholders’ meeting, which prompted Min to hold another press conference.
The Second Press Conference
Min, accompanied by her lawyers Timothy SK Lee and Lee Sookmi, held her second press conference on May 31 at 2:30 p.m. KST. In it, she addressed the court injunction ruling, the firing of her two former ADOR board members, her relationship with HYBE, and her KakaoTalk messages, among many topics.
The main points summarized:
Timothy SK Lee said that the court said the “betrayal” is from the KakaoTalk messages, but that is “a long distance away from having damaged the company.”
Min said she wants to “amicably settle [the situation]” with HYBE. She wants to continue NewJeans’s momentum without hitches, citing their future touring plans as large opportunities for ADOR and HYBE.
Timothy SK Lee said that the ADOR board members who were fired will continue to work at ADOR.
Min reconfirms that Bang Sihyuk did suggest sajaegi for NewJeans’s Get Up EP. She added that the proposition happened in a casual manner. However, Min said she takes that seriously because HYBE in turn has taken Min’s text messages of supposed takeover, something she marks as unserious, to an accusatory level.
Min said the earliest the new board can reconvene is on June 10. Lee Sookmi said the ADOR shareholders’ meeting lasted five minutes, and HYBE decided to fire ADOR’s board members aside from Min.
When asked if Min and a new CEO, if appointed by the new board, would become co-CEOs, Lee Sookmi said that she thinks having co-CEOs would be a breach of contract.
Min said the new directors “won’t disturb” her from her work as CEO, indicating that work will happen as usual.
When asked about her comments about NewJeans on KakaoTalk, Min said it would “take too long to explain,” going on to say that she does not recall what she said. Min said NewJeans members did reach out to her, but only because they knew that Min was hurt by the circumstances.
In addressing the comments towards other HYBE artists, Min said she too felt hurt in this situation. “I am a person too.” Min points to this ongoing hurt as the reason why the back-and-forth with HYBE needs to end. “One of my employees told me that [the public] is firing at me like I’m not a person anymore.”
Min called the meeting with Naver and Dunamu officials “staged.”
Police Investigation Ongoing
While Min still remains ADOR CEO following the temporary injunction ruling, the police investigation into her “breach of trust” continues. On May 7, Seoul Metropolitan Police Agency Commissioner Cho Jiho said the force expedited the investigation due to the public’s “keen interest” in the case. Cho reconfirmed the quickness of the investigation on May 20, saying that questioning of HYBE officials will begin that week.
HYBE reported Min for breach of trust at Seoul’s Yongsan Police Station on April 25. If the investigation finds Min guilty, HYBE can buy back her shares in the company. No estimated completion date has been given, nor is it known when the new ADOR board will meet next.