Korea Music Content Association (KMCA) Issues Appeal in Response to Min Hee-jin’s First-Trial Victory
In the first-trial ruling, the court found that Vice President Lee (name redacted) had negatively assessed the plan for members to leave, stating it would cause “too much damage on our side as well,” and determined that the phrase “in the event they claim to terminate the exclusive contract” appeared to be a hypothetical expression rather than an actual plan of action. The court further found that the primary thrust of the KakaoTalk messages was not the establishment of a new agency or preparation for an exclusive contract termination lawsuit, but rather the pursuit of a plan to acquire ADOR shares and seek a public listing, premised on the defendant’s consent and negotiation — ultimately concluding that “HYBE’s claim that plaintiff Min Hee-jin planned and carried out the poaching of NewJeans is without merit.”
Nevertheless, the Korea Music Content Association (KMCA) released an appeal stating that the first-trial ruling was likely to result in conduct that could be perceived as tampering being interpreted as legitimate business conduct, and that “the foundation of the K-pop industry is being shaken.”
The Korea Music Content Association (hereinafter “KMCA”), upon receiving news of the first-trial ruling between HYBE and former CEO Min Hee-jin, expresses its deep concern as an organization dedicated to the development and advancement of the K-pop industry.
The K-entertainment industry, which today enjoys global recognition and acclaim, has grown on the foundation of mutual trust between capital investors and those who contribute their capabilities. Without investment, talent cannot flourish; and investment without a meaningful contribution of talent holds no value. This is an indispensable partnership, regardless of scale.
At the heart of the K-pop industry is a structure in which agencies shoulder enormous upfront investment and risk during the early stages — when success is not guaranteed — in exchange for sharing the fruits of that success together within a framework of contracts and trust. If that structure is destabilized, the sustainability of the industry as a whole will inevitably be seriously affected.
In that respect, we express concern over several aspects of the ruling: the standard applied by the court to determine “breakdown of trust” appears to differ significantly from the standard recognized within the industry; the court viewed the breakdown of a trust relationship — an essential and fundamental element — far too narrowly; and conversely, by setting the bar for such a determination excessively high, there is a significant risk that conduct which the industry would recognize as tampering (i.e., a third party inducing an artist to leave during the term of an exclusive contract) may be interpreted as legitimate business conduct, or treated as an act that carries no substantive liability.
One cannot help but question whether the duty of loyalty owed to the company and its shareholders, as required by the Korean Commercial Act in the performance of a CEO’s duties, can coexist with tampering. The very foundation on which the K-pop industry stands is being shaken, as both contractual order and the stability of the investment environment are fundamentally undermined.
As is the case with all industries — and even more so with K-pop — the industry operates on the basis of trust. In a trust-based industry like K-pop, if a subsidiary CEO or key executive were to exploit improper means to extract a successful artist’s IP and pursue independence under a new entity, this would inevitably deal a serious blow to the stability of corporate governance and the predictability of investment across the entire industry. Such conduct would chill investment within the industry, which in turn could harm smaller agencies, the nurturing of emerging artists, and the broader workforce in the field. If such conduct is tolerated, what investor would commit capital to developing new artists and establishing new labels while enduring years of uncertainty? The moment capital dries up, it is the smaller agencies, the development of emerging talent, and the countless workers in the field who are the first to be destabilized.
KMCA believes this matter is not solely a problem for the K-pop industry. In all content and intellectual property (IP)-based industries that operate on the foundation of contracts, the extent to which conflicts of interest and breaches of trust by key personnel are permissible is a question that shapes the norms of the entire market. Precedents, once set, influence industry-wide transactional practices and investment judgments beyond individual cases.
Tampering is not a mere contract dispute — it is a fatal act that undermines the entire foundation of trust within the industry and one that erodes the long-term upfront investment structure from its very roots.
KMCA strongly urges the judiciary, in future legal proceedings including the appellate trial, to take into consideration the impact this matter will have not only on the K-pop industry but on all IP-based industries. In particular, we hope that clearer and more balanced standards will be established to ensure that the meaning of “breakdown of trust” in the K-pop industry — which has grown on the basis of trust between investors and producers — and the duties of loyalty and conflict-of-interest prevention owed by executives are not reduced to mere formalities. Furthermore, KMCA will spare no effort to establish industry order and protect the production system, in order to prevent the spread of tampering and similar conduct that could shake the very foundations of South Korea’s K-pop industry.