HYBE to fire NewJeans agency CEO; Min refutes accusation

HYBE Co. is seeking to sack Min Hee-jin, the chief of ADOR, its label behind globally popular girl group NewJeans, as it investigates allegations that she has been attempting to take over the label, news rocking shares of the South Korean music powerhouse on Monday.

But Min refuted the allegations in an interview with The Korea Economic Daily late Monday, saying that the conflict between the NewJeans agency and the parent originally stemmed from another HYBE label’s alleged plagiarism in directing and producing a new girl group.

Min accused Belift Lab behind ENHYPEN of copying NewJeans’ identity, styling, choreography and music video concept in producing its new girl group ILLIT, which debuted on March 25.

The new girl group’s debut album was produced by HYBE Chairman Bang Si-hyuk.

“Blinded by short-term profits, leading K-pop powerhouse HYBE has no qualms about taking advantage of successful cultural content,” said Min. “ADOR has never allowed anyone to steal NewJeans’ achievements, or heard of anyone doing so.”

Min argued that such idea theft was not a solo act by Belift Lab but under the consent of HYBE.

Min said ADOR last week sent an official letter to HYBE, demanding that the parent clarify its stand on the plagiarism that impairs NewJeans’ brand value and to come up with remedies. Instead, she was told today that she was suspended from her job and HYBE will take steps to fire her, Min said.  

INDEPENDENCE MOVE

Earlier Monday, sources in the investment banking industry said HYBE has launched an internal audit to collect evidence to prove Min’s alleged move to depart from HYBE with ADOR and its most famous group NewJeans.

The company accused Min and an unnamed ADOR executive of leaking confidential company information and encouraging outside investors to buy ADOR shares to take over ADOR.

The investigation news comes after HYBE approved Min's request to exercise her call option in acquiring an 18% stake, or 573,150 shares, in ADOR from HYBE late last year for about 1.1 billion won ($80,000) in total, as well as performance bonuses.

Following the call option exercise, HYBE’s stake in ADOR fell to 80% from 100%, and the remaining 2% is held by another company executive.

But earlier this year, HYBE suspected that Min was seeking investment from outside to secure 30% plus one share in ADOR from its parent to stand alone with NewJeans, the K-pop powerhouse argued.

“Rumors have been circulating that CEO Min has been contacting legal advisors and investors as she was seeking to set up an independent company,” said an official in the IB industry. “Using her strong bond with NewJeans members, she is suspected to have attempted to make HYBE relinquish controlling stakes in ADOR.”

Her bond with NewJeans is believed to be as strong as HYBE Chairman Bang’s relationship with global sensation BTS.

NewJeans consisting of Minji, Hanni, Danielle, Haerin and Hyejin made a successful debut in 2022, and Min, who directed and produced the group’s debut album, is largely credited for their global fame.

Since the quintet’s premiere, each of their songs “Hype Boy,” “OMG, “Ditto” and “Super Shy," have become international hits.

NewJeans is now one of the marquee names in the K-pop world as well as in HYBE, helping the Korean music powerhouse enjoy record earnings last year despite the absence of the global sensation BTS.

POWER STRUGGLE BODES ILL FOR HYBE SHARES

While carrying out a probe, HYBE has embarked on a process to fire Min.

It has already requested to hold a shareholders’ meeting to discuss Min’s resignation and sent out a letter to Min calling for her departure.

But HYBE needs approval from the ADOR board to hold a shareholders’ meeting, which would be highly unlikely because CEO Min’s confidants are currently controlling the company board.

Min and the two other board directors have been working together since their days at SM Entertainment Co.  

Min joined HYBE as its chief brand officer in 2019. Before that, the music executive directed various popular K-pop groups SHINee, f(x), Red Velvet and more at SM Entertainment from 2002 to 2018.

As news of Min’s alleged coup attempt emerges about a month before NewJeans’ comeback next month after a break, investors raised concerns about the girl group’s future, which could be HYBE's future. 

Panicked investors dumped HYBE shares on Monday, pulling the stock down 7.8% to end at 212,500 won.

Aside from ADOR, HYBE owns multiple K-pop labels such as Big Hit Music behind BTS and Tomorrow X Together; Belift Lab managing ENHYPEN and ILLIT; Source Music behind LE SSERAFIM and more.

Also under its umbrella is HYBE America, its wholly owned US subsidiary, formerly US-based integrated media company Ithaca Holdings acquired by HYBE in 2021.

Write to Jeong-Cheol Bae, Ji-Eun Ha and Jun-Ho Cha at bjc@hankyung.com

Sookyung Seo edited this article.