🔗 2024-05-02 ADOR Official Statement (Full Text)

📌 We would like to inform you of the accurate facts regarding HYBE’s claims.

We deeply regret having to issue a statement about matters other than the artists at such an important time when NewJeans’ new album has been released.

ADOR has requested on multiple occasions through conversations with the media that HYBE refrain from media activities that spread issues other than artist news so as not to damage the value of NewJeans’ efforts. HYBE also stated that it would not rebut CEO Min Hee-jin’s press conference. However, we express deep disappointment and regret that they resumed rebuttals through the media less than a day later.

Even after HYBE’s rebuttals, ADOR did not respond at all in order to not disrupt artist activities and to protect their value. However, as public confusion has been compounded by continuously unverified issues, ADOR would like to provide accurate facts regarding the matters currently in dispute.

📌 1. Regarding the Management Takeover

The “management takeover” that HYBE claims is a baseless allegation with no substance. Furthermore, the materials presented as evidence were not intended for the purpose of seizing management rights but were ‘imagination’ that emerged amid ongoing conflicts with HYBE. We once again clearly state that there was no specific plan or execution related to this.

When the audit began and the smear campaign became severe, a Vice President who was deeply concerned about CEO Min Hee-jin’s well-being visited HYBE’s key executives to request that they stop the one-sided public opinion war. However, HYBE executives attempted to persuade him to cooperate with HYBE, saying things like ‘This is not the time to worry about CEO Min Hee-jin,’ ‘If you get sued and become the fall guy as a working-level employee, how will you handle the damages you’ll have to pay?’ and ‘Think about your family.’ They psychologically pressured the Vice President into signing a consent form for information disclosure by saying ‘There won’t be any problems if you cooperate.’ The next day, the Vice President’s KakaoTalk messages were disclosed to the media. This is a serious invasion of personal privacy and a violation of human rights.

Recently, when CEO Min Hee-jin’s legal representative checked with Yongsan Police Station to submit a power of attorney, it was confirmed that the Vice President who wrote the document in question was excluded from the list of accused persons.

HYBE maliciously edited the conversation contents without considering the context before and after, making it appear as if the original purpose was to seize management rights, and deliberately reported this extensively to the media. CEO Min Hee-jin’s statement ‘This needs to be private talk’ was also edited together from a statement completely unrelated to the matter in question.

📌 2. Regarding Financial Compensation

First of all, CEO Min Hee-jin stated at the press conference that her ‘incentive’—not annual salary—was 2 billion won. This is compensation for achieving 33.5 billion won in operating profit just two years after ADOR’s establishment.

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

Distorting the facts regarding incentives and obscuring the issue by mentioning CEO Min Hee-jin’s salary, incentives, and stock compensation can only be seen as HYBE attempting to create a false frame that CEO Min Hee-jin is motivated by financial greed.

📌 3. Regarding the Internal Reporting and Audit Process

HYBE says that CEO Park Ji-won replied to ADOR’s whistleblower email at 10 AM on April 22. At the same time, HYBE began the audit by seizing the Vice President’s laptop, among other actions. Not only that, but they simultaneously sent an official notice demanding CEO Min’s resignation and requesting the convening of a shareholders’ meeting. Then, just a few hours later, news articles reporting that audit rights had been invoked against ADOR executives were published in succession. And the following day, articles continued as if in real-time coverage due to HYBE’s personal attack-style media activities. We would like to ask HYBE: What response did you give to CEO Min Hee-jin’s whistleblower email?

We would also like to ask: What kind of publicly listed company broadcasts audit contents that should be conducted confidentially, editing and reporting even unverified contents as if in real-time coverage? Moreover, an artist under a subsidiary label was about to have a comeback.

This invocation of audit rights is causing serious disruption to the work of CEO Min Hee-jin and ADOR members who were working day and night ahead of NewJeans’ comeback. In particular, HYBE claims that they provided new laptops immediately upon return and downloaded existing materials to ensure no disruption to work, but this is not true, and the Vice Presidents’ laptops were seized without even time to download existing work materials. The seizure process was also not reasonable.

📌 4. Regarding HYBE’s Promise to Debut Them as the First Girl Group

HYBE had already publicly announced NewJeans as the Min Hee-jin girl group and HYBE’s first girl group since the ‘Plus Global Audition.’ This is a fact that the NewJeans parents and ADOR employees at the time all remember as witnesses. In the end, LE SSERAFIM became HYBE’s first girl group with the recruitment of Sa* and Kim C***, and even though it has been revealed as fact that HYBE did not keep the promise of ‘HYBE’s first girl group,’ HYBE continues to make false claims. At that time, CEO Min Hee-jin gave up her equity stake and requested the establishment of ADOR, and endured various disputes during the establishment to transfer the NewJeans members to ADOR and debut them.

Despite the truth about NewJeans’ debut process, it is deplorable that HYBE continues to lie about what has already occurred, claiming that ‘NewJeans’ debut schedule was inevitably delayed regardless of HYBE’s intentions due to splitting the company and transferring contracts.’

📌 5. Regarding the Claim That They Were Told Not to Promote NewJeans at Debut

HYBE claims there was concern that information about Sa****’s joining Source Music and NewJeans’ member composition might be exposed together, but this is not only different from the facts but also logically inconsistent.

How does revealing that the ADOR debut team is ‘a team composed only of rookies’ have anything to do with Sa**** joining Source Music, and what problem would it be if information about ADOR debut member composition were exposed? There is no explanation at all.

HYBE made the excuse that ‘The debut timing of the two teams followed one after another, so there was insufficient time to fully promote each, so we decided to set a minimum promotional period,’ but in reality, there was no such agreement. At the time, HYBE wanted to create confusion in the market that LE SSERAFIM might be the Min Hee-jin girl group, and accordingly, CEO Park Ji-won explicitly asked CEO Min Hee-jin through phone calls and SNS not to promote NewJeans. This can be confirmed through the SNS conversation records between CEO Park Ji-won and CEO Min Hee-jin, yet HYBE keeps changing its story with unrelated reasons.

📌 6. Regarding the Claim That It Was Not a Slave Contract

CEO Min Hee-jin is not denying the necessity of the non-compete clause itself. As the CEO of a company engaged in the entertainment business, she is well aware that she may be prohibited from engaging in competing business during her tenure and for a certain period thereafter. However, the subject business and duration of the non-compete should be reasonable, and the current shareholders’ agreement is not.

Unlike the official statement on April 25, HYBE’s rebuttal released on April 26 and distributed to all media blamed CEO Min Hee-jin for making the shareholders’ agreement public while partially disclosing its contents in their rebuttal.

The unreasonableness of the current shareholders’ agreement lies above all in the fact that CEO Min Hee-jin can only be freed from the non-compete clause when she no longer holds any shares, and it would be natural for anyone to want to resolve such unfairness. HYBE says through its rebuttal that it sent a response last December saying ‘There were differences in interpretation of the sale-related provisions in the contract, and we will resolve the ambiguous provisions,’ but that content is not ambiguous to any legal professional, and CEO Min Hee-jin must continue to bear the non-compete obligation until she disposes of all shares with HYBE’s consent. Although they say they sent a response about resolving ambiguous provisions last December, it was not until mid-March of this year that a revised proposal containing that content was received.

📌 7. Regarding Other Follow-up Reports Related to the Shareholders’ Agreement

Following HYBE’s rebuttal, numerous follow-up reports that HYBE confirmed through the media are rife with speculation and distortion regarding the shareholders’ agreement. We inform you to correct further misunderstandings.

HYBE is creating the impression that the current conflict stems from financial motives by claiming that CEO Min Hee-jin demanded 30 times the multiple regarding the put option. However, the 30 times multiple reflected the future value of boy group production, and it was merely one of the proposals during the process of changing the shareholders’ agreement that had various unreasonable elements, and it was not even a priority item in the negotiations.

Additionally, HYBE promised CEO Min Hee-jin an additional 10% of ADOR shares as stock options at the time of signing the stock purchase agreement and shareholders’ agreement in March of last year. However, as a result of legal consultation, it was learned that stock options cannot be granted to CEO Min Hee-jin, who is a major shareholder under the Commercial Act. These stock options were not requested by CEO Min Hee-jin; they were proposed by HYBE. CEO Min Hee-jin could not shake the judgment that HYBE had deceived her. It was a matter of ‘trust.’

HYBE claims that it offered to release her from the non-compete obligation and that CEO Min Hee-jin rejected this, but this is also not true. HYBE proposed that she serve for 8 years mandatorily, bear the non-compete obligation for 1 year after retirement, and that the put option be exercised in stages according to that period. However, while the shareholders’ agreement negotiations were ongoing, the ILLIT-related controversy broke out and has continued to this day. CEO Min Hee-jin has not communicated any position regarding HYBE’s proposal. It is not true that CEO Min Hee-jin expressed her intention to reject.

📌 8. Regarding the Fact That the Shaman Is Simply an Acquaintance

NewJeans’ success and the remarkable performance that ADOR achieved in a short period of time are based on rational business decision-making. These claims appear to be HYBE constructing such a frame to disparage and deny ADOR’s success.

ADOR’s revenue and operating profit are attributed to preventing unnecessary expenditures, efficiently managing the budget, and raising the brand’s value by enhancing its image. If what they claim were possible, why would CEO Min Hee-jin and ADOR members be working so hard day and night?

It is pathetic that HYBE, which should be leading K-POP, not only attempted personal defamation framing unrelated to the issue and not worth responding to, but also announced it just before CEO Min Hee-jin’s press conference.

📌 9. Regarding the Fact That HYBE Does Not Care About NewJeans

It was HYBE that announced the audit to the media on April 22 along with the sudden audit, even before the audit results were out. While claiming an impossible ‘management takeover’ without any specific evidence, they did not even attempt to internally hear ADOR’s position and triggered this issue ahead of NewJeans’ comeback.

HYBE claims that it proposed ‘let’s not mention the artists.’ If they judged that bringing out a problem that could have been resolved quietly internally to attack CEO Min Hee-jin and ADOR would not affect NewJeans’ brand value, this is a notion that does not understand label management at all and is sophistry to cover up their own management misjudgments.

We hope the above content helps to resolve further speculation and misunderstanding.

On April 16, CEO Min Hee-jin conducted internal reporting, pointing out various issues, saying that “HYBE lacks the preparation, understanding, and attitude for a multi-label system.” It was frank advice given trusting the guideline proposed by Chairman Bang Si-hyuk to “speak up with differences and opinions even if it’s difficult when facing absurdity and irrationality in the business,” but it has returned as the current extreme situation along with claims of “breach of trust.”

ADOR will devote all its efforts to supporting NewJeans’ activities now and in the future. If HYBE truly wants to protect IP as it claims, and if it truly thinks about the interests of shareholders, we hope it will stop its unconvincing smear campaign and show common sense by supporting ADOR to fully concentrate on creative work.