Rippling Effects
Author’s note: This is part of a series of posts which details the conflict between HYBE and ADOR.
25 April: The Aftermath of the Press Conference
After that long and quite confusing interview that left more questions than answers and had more demands for clarification than action, HYBE was quick to act in order to protect both their reputation as well as their assets.
On one hand, the company took measures to protect artist rights, specifically for NewJeans, in the midst of all the toil and trouble. Not only that it assured legal protection for the band by assigning a different law firm and once again reminding the public of their capacity to file charges toward those who “infringe on the rights and interests and harm their reputations,” but it also the public that artists will get all the necessary support.
The niceties toward NewJeans, however, doesn’t translate with their treatment of ADOR CEO Min Hee Jin’s press conference. HYBE published a separate statement as a response, one that would go down as a declaration of a kind of war on publicity.
This is a notice from HYBE.
Of what was claimed by CEO Min Hee Jin at the press conference today, there is so much that is far from the truth to the point that it is difficult to go through them one by one.
CEO Min distorted the facts by mixing up the timeline and presented her characteristic distorted way of interpretation in a public setting.
We can refute all claims with evidence, but we have decided not to mention them one by one as we judge that they are not worth responding to.
However, we will diligently comment about the facts that must be clearly stated in business terms among the inquiries from media.
We respectfully request CEO Min to stop lying that, “there was no offer for dialogue,” and that, “there was no email response,” return the information assets as requested, and respond promptly to the audit. We urge her to resign promptly for the proper management of ADOR as she has already proven herself unfit to be in charge of management.
Also, please stop continuously mentioning artists and their parents as it degrades the value of the artists.
However, HYBE seems to have bigger problems than Min Hee Jin and ADOR after that press conference. There was damage done when Min’s expose involved not only ILLIT and BELIFT Labs, who Min accused was plagiarizing NewJeans, but also Source Music and LE SSERAFIM. As what appears to be the protocol in the recent years, HYBE released another statement for the legal protection of Source Music, LE SSERAFIM, and the individual members involved (Kim Chaewon and Sakura Miyawaki, specifically).
It is not surprising, therefore, that the next statement that HYBE releases were clarifications and refutations of Min’s claims in which all these other entities are mentioned; however, they zeroed in on some crucial points on said statement. Those points, sumarrized, are as follows
- Regarding the claim that the takeover of management rights was a joke or casual talk. HYBE claimed that its audits revealed a long exchange between Min and the executives of ADOR which suggest a huge takeover, and the most compelling evidence that they found are (a) that one person identified to be a core executive of ADOR is in constant conversation with a “certified public accountant with professional knowledge of corporate governance who has conducted HYBE’s IPO duties and numerous M&As (mergers and acquisitions,)” (b) that such conversations were conducted during multiple instances and over a long period of time, and (c) that Min was once mentioned to “wrap” the conversation as “casual talk.” For HYBE, these details are convincing enough that this is not considered a joke or some casual talk.
- Regarding the claim that the monetary compensation was not enough. Even with merely rough figures, HYBE was straightforward regarding this matter. They said that Min was one of the highest paid executives in HYBE, and that does not yet figure in the values of the stock that she owns in the company; however, the best that HYBE mentioned regarding stock value was that “it cannot be imagined by normal people.” But it was clear to them that Min’s actions, specifically the takeover of the company, was done on the pretext that they did not reach an agreement regarding the increase of stock property.[1]
- Regarding the claim that the audit began immediately without a response to the whistleblowing e-mail. HYBE was very detailed on this matter: there was indeed a response to the internal report that Min frequently mentions in her interviews. It was six pages long, on an A4 paper, sent on 22 April 2024, 10:01 a.m. They even noted that the reply was read and that the e-mail was sent.[2] The content of the audit, however, as HYBE argued, was a fruit of several months of investigation, and they contend that “it would be absurd if an audit schedule for serious misconduct should be notified in advance.”[3]
- Regarding the claim there was no guidance in terms of returning information assets. According to HYBE, Min did not respond at all when asked to return the company devices, having already imposed two deadlines for it. They also clarified that new devices were provided to the concerned ADOR members in order to not disrupt work and activities concerning NewJeans.
- Regarding the claim that HYBE promised to debut [NewJeans] as [HYBE’s] first girl group. The version of the story that HYBE released on this matter has coherent details and seems to be more credible. They said that because of the formation of ADOR, it took some time to do the paperwork and revise the required contracts before NewJeans can officially debut. They also turned the tables on Min, saying that it was in fact she who wanted to debut late, and naturally, HYBE and SOURCE MUSIC weren’t willing to adjust their timeline and instead went ahead with the LE SSERAFIM debut.
- Regarding the claim that she was told to not promote NewJeans at debut. HYBE’s response regarding this matter was quite vague, since according to them, they had to set “minimum promotional periods” because the debut of NewJeans was delayed due to the discussions between Min and SOURCE MUSIC. I take this to be HYBE’s strategy of avoiding overlapping promotions so as to maximize the use of time and content to introduce LE SSERAFIM (and then NewJeans). And apparently, HYBE’s specific reply to Min was that SOURCE MUSIC actually stretched its schedule to accommodate ADOR and even gave a few months’ time for ADOR to make its move.[4]
- Regarding the claim that HYBE is neglecting the promotion of only NewJeans. To be fair to HYBE’s media team, they had to make sure that this Min was vague on the matter, and that needs to be refuted and clarified. Let me just quote the response here in full:
“The HYBE Communication Organization is putting in full effort for the promotion of NewJeans. Last year, 273 press releases were written and distributed for NewJeans alone. Compared to the 659 press releases for BIGHIT MUSIC, which operated a total of eight teams including BTS as a group and individually, and 365 press releases for PLEDIS Entertainment, which operated four teams including SEVENTEEN, it is difficult to claim that ‘we’ve been neglecting promotion of NewJeans only.’ Our PR is promoting all labels and artists without discrimination and doing their best to promote them.”
I guess this is self-explanatory.
- Regarding the claim of a slave contract. This, I think, is the more interesting item of this response, as it shows that Min and HYBE are arguing on different grounds. According to HYBE, this is not a slave contract because Min is guaranteed to earn 100 billion won by the end of her contract on November 2026. Min, on the other hand, puts emphasis on the fact that she is bound by the contract until November 2026, implying that what is oppressive is that she would have to be in the company until that time, and (as it seems) she will not get any of the shares she is owed if she ever ends her contract before that due date.
In effect, this seems to just be both HYBE and Min cashing in on this vague remark, which can be settled by a contract renegotiation; however, because this has become spilled tea, things will get more complicated.
- Regarding the claim telling us to do ESG management. For those who are not aware of this, HYBE has an environmental, social, and governance management that promotes sustainable development, which is a more integrated framework than the old (and quite familiar) notion of Corporate Social Responsibility. I see that the company brings it up just for clarification, as well as to point out that ADOR does not follow the company’s model and thrust in this direction.
- Regarding the claim that there was no attempt for conversation. In this section, HYBE claims that it was actually Min that, during the negotiation regarding shareholder agreement, “ secretly took in HYBE’s internal lawyers and accountants to be consulted on changing the shareholder agreement and raising issues in the form of whistleblowing, and she contacted law firms and institutional investors, etc. to discuss the takeover of management rights.” It seems that this is the more crucial point in tracing the timeline that led to this public clash between HYBE and Min, because the company is actually claiming that Min blackballed them right from the beginning and turned the tables (and public opinion) against HYBE.
- Regarding the claim that the shaman is simply a friend. This might create the impression that HYBE is being too nitpicky with high profile employees that their relationships must be made known by the company; however, when they said that “[a]n outsider involved intricately in overall management cannot be viewed as a mere friend,” they really substantiated it. They made it make senses in such a way that one would not disclose intricate company strategies and stock options within a conversation about a company takeover. This isn’t merely friendship.
- Why during the comeback period…? Regarding the claim that HYBE does not cherish NewJeans. In this regard, HYBE somehow brought the mud back to Min by saying that Min and ADOR planned on attacking HYBE at the time of NewJean’s comeback, and what HYBE did when they called for the audit can be considered as a preemptive strike to prevent more damage from happening. And Verbatim, it reads as such: “CEO Min’s side is the one actually threatening the company using the artist as hostage. If the compensation request is accepted, it’s good, and if not, they intend to use it as a pretext to end the relationship.”
As a conclusion, it seems that HYBE really wanted to put things in context and clarify what were misrepresented in Min’s position. However, this really doesn’t do much except precision. The position of HYBE remains the same and this long letter can be summarized in a few words: HYBE will continue the investigation and will press charges against ADOR and its CEO Min Hee Jin.
What was largely unspoken here, however, is the complexity of public opinion. There were news reports that despite confusing statements, Min received public support and sympathy in going against a “super-company” like HYBE. But then, there were also those who saw this as a slugfest between two greedy parties, given their corporate identity. The view of the market, however, is that whatever Min was wearing that time sold out, and it makes for good publicity.
Whatever one’s position is, the cards have been dealt, and there would be no other end to this conflict except to bring this to court and make moves from there onwards.
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[1] I think this needs more contextualization in future posts.
[2] This sounds vague to me, assuming that the translations were correct. I imagine how HYBE confirmed that the letter was indeed read. Was it received by the Office and an e-mail was sent to her? Was it through a messaging account or an e-mail account that notifies senders that supposed recipients read wha they sent?
[3] Insofar as ethical issues are concerned, it must be made clear that unannounced audits may be impractical and unconventional, but companies are not hindered from doing so, especially if there is suspicious activity that is going on.
[4] For context: LE SSERAFIM debuted with their Fearless EP on 2 May 2022, while NewJeans debuted on 22 July 2022, two and a half months apart.