What we know about the HYBE-ADOR rift so far

Industry

Published: 23 Apr. 2024, 19:07 Updated: 24 Apr. 2024, 11:10

What we know about the HYBE-ADOR rift so far

Members of NewJeans perform at the Lollapalooza Music Festival on Aug. 3, 2023, at Grant Park in Chicago. [AP/YONHAP]

An ongoing spat between HYBE, the powerhouse label behind BTS, and its subsidiary ADOR is snowballing into a major K-pop dispute, pushing the state of NewJeans, the minor label's only artist, into a precarious position.

The case was made public when HYBE started probing ADOR and its CEO, Min Hee-jin, on Monday over an allegation that she sought to challenge HYBE's control of her label.

Min denies the accusation, claiming that parent company has been holding a grudge against her ever since she complained about ILLIT, a rookie girl group under HYBE that she contends copied NewJeans’ concept.

While HYBE has requested that the subsidiary hold a shareholder meeting to fire Min as CEO, chances are slim because holding an extraordinary shareholder meeting requires approval of ADOR board members, which include Min herself and close aides.

With a case such as this loaded with rumors and speculation, the Korea JoongAng Daily has organized what has been revealed so far.

Did the ADOR CEO attempt to seize management control?
HYBE said on Tuesday that documents were discovered in its internal audit of ADOR appearing to prove that Min and other executives were attempting to break away from the main label.

The K-pop agency said that related documents are undergoing a forensic analysis, although the company suspects that they were written by a vice president of ADOR who has close ties to Min.

HYBE CEO Park Ji-won told the employees in a corporate email that the probe was launched to uncover and rectify the situation that “clearly reveals an attempt to take over [the subsidiary].”

"ADOR is not properly responding to the company’s audit and is refusing to provide answers,” he said. “A majority of their claims are either untrue or lack evidence.”

The original documents have not yet been publicly disclosed, but local media reports said they contained two scenarios: One, lure a private equity firm to buy HYBE’s 80 percent stake in ADOR. The two potential candidates are suspected to be GIC, a Singaporean sovereign wealth fund, and PIF, Saudi Arabia’s sovereign wealth fund. The other scenario involves the establishment of a new, independent unit with NewJeans — based on the premise that there was evidence enough to claim that the label and the group were mistreated by HYBE.

Min, for her part, has stated that it’s “impossible” for her to seize ADOR’s management rights, an opinion echoed by legal experts. According to an exclusive report from local media outlet Ilgan Sports, she "never met with any investors for the purpose of taking over ADOR.”

Min's holds a minority stake in the label at 18 percent, a share that attorney Roh Jong-eon of Yoon & Roh told the Korea JoongAng Daily renders it “structurally impossible” for the ADOR CEO to attempt a takeover.

“What HYBE is claiming is that Min attempted a hostile merger and acquisition through a third-party equity offering,” Roh said. “But for one, that is impossible because ADOR is not a listed company, and two, the issuance of new shares conventionally needs approval from the parent company’s board of directors. Unless ADOR executives had some sort of other clause or condition to acquire more than half of its agency’s stake, it is theoretically impossible.”

How is the debut of ILLIT related to the ongoing controversy?
Min claims in a statement that HYBE has been carrying out a vendetta against her ever since her objection to ILLIT, a rookie girl group that debuted last month under ADOR’s sister label Belift Lab.

Min practically accused the new group of copying everything from NewJeans — “including hair, makeup, costumes, choreography, photos, videos and event appearances.”

“This is truly a shameful affair,” she said in a statement Monday. “HYBE Chairman Bang Si-hyuk was involved in the production of ILLIT’s debut album. The plagiarism of NewJeans by ILLIT is not solely the doing of the label, but also involves HYBE.”

HYBE CEO Park fired back against the ADOR CEO's claim, saying that the internal audit was conducted because the attempted takeover was “preplanned, [and is] unrelated to the timing of ILLIT’s debut.”

Park also conveyed encouragement to Belift Lab and its group.

“I know better than anyone the efforts made for ILLIT’s debut,” he said. “While the sudden flood of news may be disheartening, please do not be upset by false information and continue to strive for ILLIT’s success."

How could the plagiarism issue affect the ongoing dispute?
Should Min decide to pursue the plagiarism issue in court, Roh warns that things could become complicated.

“Plagiarism is a tricky matter and as of now, it’s difficult to decide if ILLIT plagiarized NewJeans,” Roh said. “Everything from the songs’ concepts, rhythm, lyrics and choreography need to be minutely analyzed. If the court finds close similarities in a long, continuous manner, the likelihood of plagiarism becomes higher. If there are shorter, similar parts not only from NewJeans but also other songs by different artists, then it’s generally considered common, so it can’t be called plagiarism.”

What will happen to NewJeans?
NewJeans' comeback in May will proceed as planned, according to an anonymous source at HYBE. The famed quintet that stormed into the K-pop scene with its debut in July 2022 is famously known as “Min Hee-jin’s girl group” and rolled out a series of hit songs such as “Attention,” “Ditto” (2022), “Hype Boy” and “OMG” (2023).

The girl group planned to release a new single on May 24 in Korea before making its official Japanese debut on June 21, heading straight to the Tokyo Dome for a fan meet and greet.

With the claws out for both HYBE and ADOR, all eyes are on the girl group, which is at the center of the whole dispute. There are pretty large questions raised — will Min break away from HYBE, and will NewJeans follow her or choose to stay?

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]