Dismissal of Injunction to Convene ADOR Extraordinary Shareholders’ Meeting and Reappoint Inside Director
The 50th Civil Division of the Seoul Central District Court dismissed the injunction filed by former CEO Min against HYBE regarding the exercise of voting rights and other matters.
The court stated, “ADOR directors must independently decide whether to approve or reject agenda items and have no legal obligation to follow HYBE’s instructions,” and ruled that “even if an injunction were to be ordered as requested by former CEO Min, no legal effect would occur, and therefore there is no benefit to the application.”
Additionally, regarding the so-called ‘procure’ clause, which guarantees that shareholders will ensure specific management policies or decisions, the court explained, “There is controversy over the validity of procure clauses as they contradict basic principles of commercial law,” and stated that “the validity of this clause should be determined in the main lawsuit, and at this stage, it is necessary to be cautious about ordering its enforcement.”
We would like to inform you of former CEO Min Hee-jin’s position regarding this injunction decision.
- The court did not rule on whether the shareholders’ agreement is valid.
- The court determined that there is no benefit to the lawsuit because even if HYBE were ordered to instruct ADOR directors on business execution, ADOR directors have no obligation to comply.
- We reiterate that the injunction was dismissed due to legal reasoning related to the validity of the procure clause, and the validity of the shareholders’ agreement has not been denied.
- The shareholders’ agreement between HYBE and former CEO Min Hee-jin remains valid and in effect.
- According to the shareholders’ agreement, former CEO Min Hee-jin’s term as CEO of ADOR is guaranteed until November 1, 2026. Therefore, former CEO Min Hee-jin once again requests that ADOR directors appoint her as CEO at the ADOR board meeting scheduled for October 30, 2024.
- If HYBE and the ADOR directors appointed by HYBE violate the shareholders’ agreement by not reappointing former CEO Min Hee-jin as ADOR CEO, former CEO Min Hee-jin will actively consider whether to exercise her rights under the shareholders’ agreement in response to HYBE’s violation.
- This decision does not mean that the court accepted HYBE’s claims. We urge HYBE to make a wise decision for the faithful implementation of the shareholders’ agreement and for the development of NewJeans and ADOR.
We are grateful for the court’s wise decision. With this decision as an opportunity, HYBE will do its best to normalize ADOR, advance the multi-label system, and support artist activities.