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According to the most recent information on the subject, South Korean media outlet Kookmin Ilbo reported on May 2, 2024, that ADOR's CEO, Min Hee-jin, has asked for the authority to end NewJeans's agreement with the company as early as 2024.
The time frame of Min Hee-jin's 5% putback options, which were purportedly 30 times the number of putback options, was the subject of a controversy between HYBE and Min Hee-jin regarding the evaluation that led to this decision.
Allegedly, the ADOR CEO asked to raise the putback option multiplier from 13 to 30 times. Her prior ownership in ADOR was 15%. However, following the success of NewJeans, HYBE awarded her an additional 5% stake. It was also mentioned that she had proposed her own initiative as the label's CEO without following the conventional procedure of a director's meeting.
HYBE claims Min Hee-jin seeks to turn ADOR into a shell company to gain full control, ADOR issues a letter
The exclusive contract rights of a music agency's vocalists are viewed as a vital resource essential to the business's day-to-day operations. Under this, big entertainment companies, such as HYBE, SM Entertainment, JYP Entertainment, and more, typically need the approval of the board of directors before granting exclusive contracts.
During this period, Min Hee-jin's legal team delivered a new shareholder agreement to HYBE. The agreement contained revisions that would give NewJeans the unfettered power to discontinue its exclusive contracts at Min Hee-jin's sole judgment without needing approval from HYBE or the board of directors. However, HYBE rejected this suggestion as per other reports since they still own over 80% shares of ADOR.
As per media sources, HYBE deduced from the audit results that Min Hee-jin's ultimate intention was to execute the put options in January 2025 and depart, therefore converting ADOR into a mere shell company.
After ADOR lost money, she intended to urge HYBE to offer up the label to her, paying a fair price with the help of her exterior funds. She planned to buy the remainder of her label shares with the money she had amassed from her position as CEO of ADOR.
Meanwhile, on May 2, 2024, ADOR issued a long, full-length official statement to the media, translated by Allkpop and Soompi, refuting every allegation and claim made by HYBE. The letter mentioned that to preserve the value of NewJeans' efforts, ADOR has repeatedly asked HYBE to abstain from using the media to promote irrelevant subjects to the artists.
However, since the ongoing escalation of unverified concerns has further exacerbated the public's uncertainty, the HYBE subsidy decided to put out a lengthy notice highlighting several pointers and refuting claims of usurping management rights. ADOR underscored Min Hee-jin's 20 billion won incentive mentioned during the audit, LE SSERAFIM becoming HYBE's first girl group instead of NewJeans, for asking Min Hee-jin's resignation, and more.
Moreover, under point 7 in the letter, the "30 times putback options" was mentioned. They wrote that it wasn't even a top priority during the talks. The "30-fold increase" was suggested when the shareholder agreement was being revised to remove certain irrational provisions and account for the potential value of forming a boy group.
"HYBE is trying to deceive by claiming that Min Hee Jin demanded a 30-fold increase regarding the put stock options, making it seem like the current conflict stems from financial motives. However, the 30-fold increase was a proposal made during the process of revising various unreasonable elements of the shareholder agreement to reflect the future value of creating a boy group, and it was not even a prioritized item in the negotiations." (as translated by Allkpop)
ADOR continued:
Additionally, in March of last year, HYBE promised Min Hee Jin an additional 10% stake in ADOR as stock options upon signing the stock trading and shareholder agreements. However, a legal consultation revealed that stock options cannot be granted to Min Hee Jin as a major shareholder under corporate laws. These stock options were neither requested by Min Hee Jin nor were they her proposal; they were suggested by HYBE. Min Hee Jin could not shake off the perception that she was deceived. It was a matter of 'trust'.
Currently, Min Hee-jin is one of three members of ADOR's board of directors. In line with the present organizational framework, HYBE, which owns 80% of ADOR, can still convene a meeting and change ADOR's board members as needed.
Min Hee-jin has explained her actions in reaction to recent stories, stating that they were intended to address what she considers to be unwarranted intervention. According to her, HYBE falsified and twisted the facts to influence public opinion. Her representatives submitted the updated shareholder contract to HYBE on February 16, 2024, and HYBE's claims of a takeover of management powers by her were first made public on April 4, 2024.
This also suggested that these charges had nothing to do with HYBE's most recent assertions and were premature. On April 25, 2024, Min Hee-jin reaffirmed that she did not create or carry out any plans for a coup during a news conference.
Furthermore, ADOR ended its full-length statement by highlighting that CEO Min Hee-jin conducted a confidential assessment on April 16, 2024, and identified several problems, concluding that HYBE is unwilling to operate on a multi-label system. They accused the parent company of turning her statements against her and of "professional malpractice."
In other news, on May 2, 2024, NewJeans' most recent song, Bubble Gum, surpassed 19.44 million views on YouTube since its release on April 27, 2024. The song is followed by the release of the group's next single, How Sweet, which will be released on May 24, 2024.
