2024-05-02 ADOR Statement

Source: ADOR Releases In-Depth Statement In Response To HYBE's Stance | Soompi 

We would like to provide accurate facts regarding HYBE’s claims.

We deeply regret having to release a statement on a matter other than [news about] our artist again at an important time when NewJeans’s new music is being released.

ADOR has repeatedly requested HYBE to refrain from media activities that spread news about other issues unrelated to news about the artist so that the value of NewJeans’s efforts is not damaged through conversations with the media. HYBE also stated that they would not refute the press conference held by CEO Min Hee Jin. We express deep disappointment and regret that HYBE resumed its refutation through the media in less than a day.

Despite HYBE’s refutation, ADOR has not responded in order to not cause harm to the artist’s activities and to protect their value. However, as unverified issues continue to add to the public’s confusion, ADOR wishes to clarify the accurate facts regarding the current controversy.

1. Regarding the takeover of management rights

HYBE’s claim of a “management rights takeover” is baseless. The evidence they provided was not intended for a takeover but emerged from ongoing conflicts with HYBE based on “imagination.” We reiterate that there was no specific plan or execution related to this.

As the audit began and the malicious battle of public opinion worsened, the [ADOR] vice president who was quite concerned for Min Hee Jin’s safety approached HYBE’s senior management to request a halt to their unilateral battle of public opinion. However, HYBE’s management responded that it was not the time to worry about Min Hee Jin and coerced cooperation with statements such as, “If you get sued and your tie gets cut off for being the person in charge, how are you going to cover the damages you have to pay?” and “Think about your family.” They psychologically pressured the vice president into signing a consent form for information provision by saying, “There will be no issues if you cooperate with us.” The next day, the vice president’s KakaoTalk messages were disclosed to the media. This is a severe invasion of privacy and violation of human rights. Recently, Min Hee Jin’s legal representative confirmed with Yongsan Police Station, in the process of submitting the power of attorney form, that the vice president who wrote it was excluded from being a defendant.

HYBE maliciously edited the content of the conversations to make it appear as if the original intention was to take over management rights and intentionally publicized this extensively in the media. Min Hee Jin’s statement, “This will have to be noted as being casual conversation,” which is completely unrelated to the context, was also selectively edited.

2. Regarding financial compensation

Firstly, Min Hee Jin stated at the press conference that the “incentive” is 2 billion won (approximately $1.45 million), not her salary. This was a reward for achieving 33.5 billion won (approximately $24.3 million) in operating profit two years after ADOR’s establishment.

As stated at the press conference, the issue she raised regarding the incentive calculation was not about the amount itself but about the criteria for determining the incentive and the transparency of the decision-making process. Min Hee Jin believed that HYBE’s criteria for determining incentives was unclear and that there was a lack of clear explanation regarding the process of calculating incentives.

Distorting the facts about the incentive like this and obfuscating the issue by mentioning Min Hee Jin’s salary, incentive, and stock compensation can only be seen as HYBE’s attempt to falsely frame Min Hee Jin as being motivated by financial greed.

3. Regarding the internal whistleblowing and audit process

It is said that CEO Park Ji Won replied to ADOR’s internal whistleblowing email on April 22 at 10 a.m. At the same time, HYBE not only initiated an audit including seizing the vice president’s laptop but also sent a letter demanding Min’s resignation and calling for a general shareholders’ meeting. Just a few hours after, news articles were continuously published, announcing the sudden activation of the audit rights on ADOR’s management. The following day, articles continued as if it were a live broadcast with HYBE’s aggressive media activity. We would like to ask HYBE. What was your response to Min’s internal whistleblowing email?

We would like to ask this also. What kind of listed company discloses to the public the details of an audit that should be conducted discreetly, even editing in unverified information, and reports them as if they were a live broadcast? Moreover, this happened just at the time when a subsidiary label’s artist was preparing for a comeback.

The activation of audit rights has severely hindered the work of Min Hee Jin and ADOR staff members, who were working tirelessly in preparation for NewJeans’s comeback. Although HYBE claimed that they immediately provide new laptops and allow downloading existing work materials to ensure no disruption to work, this is not true. The laptops were taken away without giving the vice presidents time to download their work materials, and the process of seizure was also unreasonable.

4. Regarding HYBE’s promise to debut [NewJeans] as the first girl group

HYBE had publicly declared NewJeans as Min Hee Jin’s girl group and HYBE’s first girl group since the “Plus Global Audition.” This is a fact remembered by the parents of NewJeans members and the executives and employees of ADOR at the time as witnesses. Eventually, with the recruitment of Sakura and Kim Chaewon, LE SSERAFIM became HYBE’s first girl group, and even though it was revealed that HYBE did not keep its promise of “HYBE’s first girl group,” HYBE is not hesitating to make false claims. At the time, Min Hee Jin requested the establishment of ADOR while giving up her shares, and she endured various disputes in order to transfer and debut the NewJeans members in ADOR.

Despite the truth about NewJeans’s debut process, HYBE claimed, “NewJeans’s debut schedule could not help but be delayed regardless of HYBE’s intention due to the division of the company and the transfer of contracts.” It is regrettable that HYBE continues to lie about the truth of what has already happened.

5. Regarding the request not to promote NewJeans’s debut

HYBE claims there were concerns that the fact that Sakura joined SOURCE MUSIC as well as the information on the composition of NewJeans members would be exposed, but this is not only factually incorrect but also logically inconsistent.

There is no explanation whatsoever on what relation there is between revealing that ADOR’s debut team is “composed only of rookies” and Sakura joining SOURCE MUSIC as well as what problems could result in exposing the information on the composition of ADOR’s debut members.

HYBE gave the excuse, “As there was not adequate time for the two groups’ promotions because their debut schedules followed one after the other right away, it was decided that minimum promotional periods would be set,” but in actuality, there were no such agreements. At the time, HYBE wanted to create confusion within the industry that LE SSERAFIM could be Min Hee Jin’s girl group, and CEO Park Ji Won explicitly asked Min Hee Jin through calls and social media [messages] for ADOR to not promote NewJeans. This is confirmed by the social media conversation records between Park Ji Won and Min Hee Jin, yet HYBE continues to change their story while giving irrelevant reasons.

6. Regarding the claim that it was not a slave contract

Min Hee Jin does not deny the necessity of the non-competition clause itself. As the head of a company engaged in the entertainment business, she understands that working in a competing business during and for a certain period after employment can be prohibited. However, business and duration subject to the prohibition of competition must be reasonable, which is not the case with the current shareholders’ agreement.

Contrary to the official statement on April 25, HYBE’s rebuttal statement distributed to all media outlets on April 26 blamed Min Hee Jin for disclosing the shareholders’ agreement and refuted by revealing part of its content.

The irrationality of the current shareholders’ agreement primarily lies in the fact that Min Hee Jin can only be freed from the non-competition clause by no longer holding any shares, and addressing this unfairness is only natural. HYBE claimed in its rebuttal that it sent a response in December last year stating, “There were differences in interpretation in the provisions related to selling stocks in the contract. We will resolve the clause with ambiguous interpretation,” but any legal expert would find the interpretation unambiguous, and Min Hee Jin would continue to bear the non-competition obligation until she disposes of all shares with HYBE’s consent. Although HYBE claimed to have sent a response to resolve the ambiguous clause in December, it was not until mid-March this year that a revised proposal containing this content was received.

7. Regarding follow-up reports on the shareholders’ agreement

Following HYBE’s rebuttal, several follow-up reports confirmed by HYBE through the media have been rife with speculation and distortion regarding the shareholders’ agreement. To correct further misunderstandings, we provide this information.

HYBE has misled by claiming that Min Hee Jin demanded an increase to 30x for the put option, suggesting that the current conflict is motivated by financial reasons. However, the 30x was a reflection of the value of our future boy group production and one of the proposals during the negotiation process to change the shareholders’ agreement with various unreasonable aspects, and it was not a priority item in the negotiations.

Additionally, HYBE promised Min Hee Jin an additional 10 percent stake in ADOR as stock options during the stock purchase agreement and shareholders’ agreement signing in March last year. However, legal advice revealed that stock options could not be granted to major shareholder Min Hee Jin under the Commercial Code. This stock option was not requested by Min Hee Jin but proposed by HYBE. Min Hee Jin could not dismiss the perception that HYBE had deceived her. It was a matter of “trust.”

It is also not true that Min Hee Jin rejected HYBE’s proposal to release the non-competition obligation. HYBE suggested that Min Hee Jin serve a mandatory eight-year tenure and bear a one-year non-competition obligation after resignation, with the put option to be exercised in stages according to that period. However, the controversy over ILLIT arose during the shareholders’ agreement negotiations, leading to the current situation. Min Hee Jin has not communicated any stance on HYBE’s proposal. It is untrue that Min Hee Jin expressed a refusal.

8. Regarding the fact that the shaman is simply a friend

NewJeans’s success and ADOR’s remarkable achievements made in a short period of time are based on rational business decisions. These claims are part of HYBE’s framing to undermine and deny ADOR’s success.

ADOR’s revenue and operating profit stem from preventing unnecessary expenses, efficiently managing the budget, and striving to enhance the brand image. If what they claim is possible, why would Min Hee Jin and ADOR’s staff members work tirelessly day and night?

It is regrettable that HYBE, which should be a leader of K-pop, attempted to frame with personal defamation unrelated to the issue and not even worth responding to, especially announcing it just before Min Hee Jin’s press conference.

9. Regarding the fact that HYBE does not cherish NewJeans

HYBE was the one who suddenly announced the audit to the media on April 22 without waiting for the audit results. Without any concrete evidence, they claimed an impossible “takeover of management rights” and did not even attempt to listen to ADOR’s stance internally, sparking this issue before NewJeans’s comeback.

HYBE claims they suggested not to mention the artist. If they believed attacking Min Hee Jin and ADOR publicly would not affect NewJeans’s brand value, it indicates a lack of understanding of label management and is sophistry to cover up their own misjudgments in management.

We hope the above information helps to resolve further speculation and misunderstandings.

On April 16, Min Hee Jin stated, “HYBE is unprepared, lacks understanding, and has the wrong attitude toward a multi-label system,” pointing out various issues and proceeding with internal whistleblowing. Despite it being a frank statement made with trust in Chairman Bang Si Hyuk’s guideline to “speak up about differences and your opinions when faced with injustice and irrationality in the workplace although it may be difficult to do so,” the situation has come to this current extreme state with accusations of “breach of trust.”

ADOR is currently contributing all of our efforts into supporting NewJeans’s activities and will continue to do so. If HYBE truly wishes to protect the IP as claimed and considers the shareholders’ interests, we hope they will stop spreading the unconvincing malicious propaganda and show a reasonable attitude by supporting ADOR so we can showcase full dedication to creation.