Yahoo Finance K-Pop Producer Wins Court Ruling to Keep Control of NewJeans
(Bloomberg) -- A Seoul court barred K-pop giant Hybe Co. from dismissing producer Min Hee-jin as head of its music label Ador, leaving her in control of acts such as the hit group NewJeans.
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The Seoul Central District Court said Hybe’s evidence and rationale were not sufficient to back the company’s case for Min’s dismissal, according to a Yonhap News report. With the court’s decision, Hybe can’t exercise its voting rights to remove Min from the record label at the company’s shareholder meeting, which is scheduled for Friday.
The power struggle at K-pop’s largest company comes as Hybe seeks to diversify through acquisitions and reduce its dependence on the superstar group BTS. Hybe bought Scooter Braun’s Ithaca Holdings for about $1 billion in 2021, but several stars later left the label.
“We urge Hybe to respect the court’s decision,” Min’s attorney said in a statement after the ruling. “If Hybe takes any action to remove Min from her position as CEO, it will be in direct violation of the shareholders’ agreement.”
Min’s attorney also urged Hybe not to dismiss two other Ador directors from their posts at the Friday meeting.
In its own statement, Hybe said it would not exercise its voting rights to try to remove Min at the shareholders gathering.
“We plan to follow up within the framework of the law,” the company said.
Min was scouted by Hybe founder Bang Si-hyuk in 2019 after she resigned from rival K-pop company SM Entertainment Co., where she spent more than 15 years as a producer behind popular idol bands such as EXO and Red Velvet. But the relationship between the two producers quickly soured over the debuts of girl groups produced by each of them. In early April this year, Min sent a lengthy letter to Bang and Hybe management alleging they discriminated against NewJeans.
The internal strife between Min and Hybe’s management spilled into public view in April after Hybe started an internal audit against Min. The company’s executives probed whether she had attempted to seize the control of the label from the parent company by contacting investors for a potential management buyout or initial public offering. Min, who owns 18% of Ador shares, has denied the allegations.
Min then held a dramatic press event that drew millions of viewers online. She said that her contract with Hybe was unfair and that headquarters had underestimated the value of the label behind NewJeans.
Hybe refuted Min’s claims and filed a complaint with the police to investigate Min for alleged breach of duty. Min filed the injunction request to block Hybe from exercising its voting rights in Ador during the shareholder meeting on Friday. Each side staged campaigns to win public support. Bang and the Korean producers behind Hybe labels filed petitions to the court, while NewJeans’ members and their fans signed onto Min’s petition, according to Yonhap.
Hybe Chief Executive Officer Park Ji-won has tried to encourage employees not to let the case affect their work, according to local reports, which cited an internal memo he sent after the ruling was announced. Park pledged to protect the intellectual property employees have created.
The K-Pop drama isn’t fully resolved. Hybe plans to continue to press its case that Min sought to take control of Ador. In the meantime, Min will be able to set the direction for NewJeans, which helped Ador generate about 100 billion won ($73 million) of revenue last year.
(Updates to add context about employee morale. A previous version of the story was corrected to remove a reference to Ariana Grande leaving the Hybe label.)
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