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On May 30, 2024, the South Korean media outlet Herald Economy reported that Min Hee-jin won an injunction lawsuit against HYBE's voting rights, retaining the position as ADOR's CEO.
It was mentioned that the Seoul Central District Court's Civil Agreement Department (presided over by Chief Judge Kim Sang-hoon) accepted Min Hee-jin's injunction, according to which HYBE would be prohibited from exercising their voting rights against her at the upcoming meeting of shareholders.
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It was reported that Min Hee-jin filed for an injunction on May 7, 2024, to prevent the parent company HYBE from carrying out their voting rights to dismiss her from the position of CEO at the upcoming ADOR meeting of shareholders.
The court ruled that if HYBE violated the orders, they would have to pay 20 billion won in compensation to ADOR's CEO Min Hee-jin
The Seoul Central District Court has banned HYBE from exercising their voting rights at the extraordinary shareholder's meeting that is scheduled to take place on May 31, 2024. The agenda for the meeting was reported to be the dismissal of CEO Min Hee-jin, as requested by the HYBE previously. As per the reports, if the parent company violated the court's order, they have to pay 20 billion won in compensation to ADOR's CEO, Min Hee-jin.
HYBE owns 80% of ADOR's stake, 18% is owned by Min Hee-jin, and 2% has been provided to the employees. As a result, if the parent company has been restricted by the court from exercising their voting rights in the upcoming meeting, they will be unable to dismiss Min Hee-jin from the position of CEO.
As per Herald Economy, Min Hee-jin's representatives claimed that the HYBE's voting rights should be prevented at the upcoming dismissal meeting on the shareholder contract, she signed with the parent company. According to the publication, HYBE has to allow CEO Min Hee-jin's position as a CEO under the contract unless and until she violates the following clauses of the contract. These clauses are as follows:
- Articles of association or laws.
- Acts that fall under the grounds for dismissal of directors under the Commercial Act.
- Contracts are terminated.
The Seoul Central District Court has accepted Min Hee-jin's claim and stated:
"Hybe bears a contractual obligation not to exercise voting rights by dismissing Min Hee-jin at the general shareholders' meeting. Hybe argued that dismissal was possible as a right of major shareholders, but the court believed that the contract between the two sides took precedence."
The court further cited that the HYBE did not provide a valid reason for Min Hee-jin's dismissal or resignation. They stated:
"It is necessary to determine whether Min Hee-jin has reasons for dismissal or resignation through a faithful investigation of evidence and a close hearing on the main issue. The arguments and data submitted so far have not sufficiently explained the reasons for dismissal or resignation claimed by HYBE."
The Court further elaborated on its intention of banning HYBE from exercising their voting rights and stated:
"Considering that it is difficult for Min Hee-jin to receive rights relief due to the imminent holding of the general shareholders' meeting and that the loss of the opportunity to perform his duties as an Ador director for the rest of the year is difficult to recover due to monetary compensation afterward the need to ban Hybe's voting rights as a provision disposition has also been clarified."
The court also stated that it was true and clear that Min Hee-jin took NewJeans out of HYBE's control and pressured HYBE to sell its stake in ADOR to find a way to gain independent management rights for the subsidiary.
They described it as a treacherous act by Min Hee-jin but refused to believe it was a breach of trust against ADOR. The court accepted that Min Hee-jin planned ways to weaken HYBE's authority over ADOR.
In response, HYBE has released an official statement accepting the Court's decision regarding the provision injunction lawsuit filed by CEO Min Hee-jin, and they have declared not to exercise their voting rights in favor of the Dismissal of Inside Director Min Hee-jin at the upcoming extraordinary meeting of shareholders. They also planned to proceed with further steps as the court has accepted that Min Hee-jin has sought ways to weaken HYBE's control over ADOR.
