Hybe’s sublabel head demanded unilateral contract termination authority for NewJeans: sources

May 3, 2024

The head of popular girl group NewJeans’ agency had demanded its parent company Hybe give her the authority to terminate exclusive contracts with the group without approval from her company’s board of directors, sources in the music industry said Thursday, amid the worsening conflict between the two sides.

Min Hee-jin, CEO of ADOR, sent a proposal for revising the existing shareholders agreement, including the demand, to Hybe in February, but Hybe reportedly turned down the proposal as “unreasonable,” according to the sources.

The revelations came as Hybe and Min are locking horns over the former’s allegations that she attempted to seize control of the company, which she denies.

Min Hee-jin, CEO of Hybe's sublabel ADOR, speaks during a press conference in southern Seoul on April 25, 2024. (Yonhap)
Min Hee-jin, CEO of Hybe’s sublabel ADOR, speaks during a press conference in southern Seoul on April 25, 2024. (Yonhap)

Min confirmed that she submitted the proposal to Hybe in February but stressed it was unrelated to the control takeover allegations.

“The request was made to address unreasonable interference (by Hybe), an issue that emerged during NewJeans’ debut, and to ensure independent management of the label,” she said in a release.

The move came after negotiations between the two sides to revise the shareholders agreement, signed in March 2023, hit a snag at the end of last year. Min sought to amend certain clauses, including increasing the multiplier for her put-back options from the current 13-fold to 30. Hybe reportedly rejected the demand, calling it “too much.”

The existing agreement mirrors most K-pop labels, requiring a board consent for changes to artist contracts to safeguard their core assets of artists.

ADOR’s board consists of three members — Min herself and two of her close aides, identified only as Shin and Kim.

Still, Hybe, which holds an 80 percent stake in ADOR, has the right to convene an extraordinary meeting of shareholders to replace board members to prevent artists managed by the subsidiary from leaving the company when such a move is detected.

Should Min come to have the authority to terminate contracts with NewJeans, Hybe will no longer have any means to prevent the members from leaving the subsidiary. As NewJeans is ADOR’s sole artist, the agency would be left with only staff if the group departs.

Hybe reportedly suspects this is what Min meant by “making the company an empty shell” in her conversations with other board members, which was discovered during the company’s ongoing audit into the subsidiary.

Announcing an interim result of the audit last Thursday, Hybe claimed Min discussed ways to bolt from the parent company taking NewJeans with them after making the sublabel “an empty shell” or to terminate contracts with NewJeans.

Min, however, has downplayed these talks as “just private conversations,” repeatedly denying allegations she attempted to seize control of the company and secede from Hybe.

During a press conference held later in the day, Min said she has “no interest” in the control takeover.

The ongoing conflict surfaced April 22 when Hybe launched the surprise audit against the current management of ADOR.

Three days later, Hybe announced the interim result of the audit and filed complaint against her on breach of trust charges, claiming she had plotted to separate from Hybe and take NewJeans with her.

She claimed during the press conference that the audit followed her internal whistleblowing and that the disagreement over her demand to amend the shareholders agreement was actually behind the conflict.

On Thursday, she continued to refute the allegations as “groundless and false.”

“The documents presented by Hybe as evidence of its claims are nothing but ‘imaginations’ stemming from the ongoing conflict,” she said in a release. “There were no concrete plans or actions related to those claims,” she stressed.

She said her proposed 30-fold multiplier for put-back options was intended to reflect the anticipated value of producing a boy group in the future.

“It was merely one of several suggestions made during negotiations to amend the shareholders agreement, which contains unreasonable elements, and was not a top priority item in the negotiations,” she explained.