HYBE exposes Min Hee-jin for allegedly conspiring with Dunamu and Naver to take over ADOR

HYBE versus Min Hee-jin's first injunction hearing was held at the Civil Settlement Division 50 of the Seoul Central District Court at 10:45 am on May 17, 2024. The judges' panel was headed by Chief Judge Kim Sang-hoon. During the hearing, the parent company HYBE Corporation disclosed KakaoTalk chats of Min Hee-jin with Naver and Dunamu.

Chosun Biz reported that to get management rights, ADOR CEO Min Hee-jin contacted Dunamu, the operator of Upbit and Naver. Earlier, she had denied allegations of meeting any investors to stage a coup to take control of the management rights of ADOR.

On May 17, Investment Banking (IB) business and legal circles revealed that Min Hee-jin reportedly met personnel from Dunamu and executives from Naver to propose the purchase of ADOR shares. Significantly, Dunamu is the third-largest stakeholder with the ability to choose directors, owning 5.6% of HYBE.

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HYBE alleges Min Hee-jin met with Dunamu executive to takeover ADOR

Min Hee-jin had previously filed for an injunction in court on May 7, 2024. The agenda of the hearing held on May 17 was to keep HYBE from using its voting privileges at the scheduled interim shareholders' meeting on May 31, 2024. Notably, the parent company owns 80% of ADOR's shares, while Min Hee-jin owns 18%. The remaining 2% is owned by Chief Creative Director Kim and Vice President Shin of ADOR.

Sources in the legal and investment banking fields claim that a person (A) notified HYBE in February 2024 about the investment ideas that Min Hee-jin's team had made. Mr. A claimed that he received the proposal from the ADOR CEO which mentioned how she aimed to employ the Private Equity Fund (PEF) to become the label's largest shareholder and hire investors through pre-IPO investments.

The proposal also mentioned soliciting aid in shareholder approval and combined share purchase. According to Allkpop, HYBE gathered more proof of conversations between N Capital and ADOR Vice President, Lee Sang-woo, on the company's listing intentions and investor outreach.

The evidences were then submitted to the court which included chatlogs from her KakaoTalk. However, Min Hee-jin's legal team refuted the evidence as baseless and stated that she had never directly engaged with the PEF.

According to HYBE's written arguments and audit report that were presented to the court, Min Hee-jin had suggested the acquisition of ADOR at a dinner with executives from Dunamu and Naver earlier in 2024. Reportedly, the executives confirmed it by sharing the information with HYBE as they didn't want to get involved in the conflict as the company's shareholders.

As per Maeil Business, HYBE had already disclosed that Min Hee-jin was reportedly obtaining trade secrets illegally that were only available to the parent company. Hence, on April 22, 2024, the company initiated an internal investigation and obtained evidence against her.

Meanwhile, HYBE revealed further chats of Min Hee-jin where she had mentioned meeting with Dunamu and Naver. It is crucial to note that with her relatively small share ownership, CEO Min Hee-jin needs outside investment to either acquire or dilute her HYBE stock in order to obtain management rights.

"Dunamu A doesn’t even understand what is being said. Naver still understands it rather well." (as reported by Chosun Biz and translation taken from Google Translate)

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Judge Kim Sang-hoon, in charge of the Civil Agreement 50 Division, declared that they will accept further evidence from both sides till May 24. The panel will reach a conclusion prior to ADOR's interim shareholders' meeting on May 31, 2024.