Why did Min Hee Jin attempt a "Coup D'etat"? Industry insiders give their take on the HYBE and ADOR feud

HYBE has abruptly initiated an audit against the management of ADOR, the subsidiary label and agency for the 4th generation top-tier girl group NewJeans. Suspicions have arisen that Min Hee Jin and others tried to take over ADOR's 80% stake and management rights held by HYBE.

According to the music industry, on April 22, HYBE demanded a shareholders' meeting against the ADOR board of directors on the same day and started an audit against ADOR's CEO Min Hee Jin and another ADOR executive, Mr. A. HYBE is known to be retrieving company digital assets while also securing face-to-face statements from related individuals.

HYBE suspects that CEO Min Hee Jin and Executive A tried to take over ADOR's management rights. It is alleged that CEO Min and Mr. A discussed leaking confidential contracts to attract investors and also discussed ways to induce HYBE to sell the ADOR shares they hold.

When ADOR was established, HYBE held 100% of the shares. However, in 2023, CEO Min exercised a call option and purchased about 18% (573,160 shares) from HYBE for around 1.1 billion KRW (800,000 USD), becoming the company's second-largest shareholder. HYBE held 80% (2,576,000 shares) equity, with the remaining 2% reportedly held by other ADOR executives.

The ADOR executives, who collectively hold only 20% of the shares, are suspected of attempting a takeover against HYBE. While ADOR's desire for independence is understandable, it's undeniable that the fledgling agency, founded less than three years ago, has benefited from its affiliation with the 'HYBE Label,' particularly with its group NewJeans establishing itself as a leading K-pop girl group. Given the ongoing advantages of being associated with HYBE, questions have arisen about their motivation to risk a takeover.

One music industry insider commented, "Since the ADOR board is filled with people from CEO Min's side, if they have the right internal information, they could easily take control. There's a strong sentiment within ADOR that 'CEO Min is ADOR,' and even if the company becomes independent, they believe they can still exert the same influence." They added that although HYBE has demanded a shareholders' meeting, there's a high probability that the board members will side with CEO Min, making the outcome uncertain.

It is suspected that ADOR executive Mr. A, known as the "right-hand man" of CEO Min, used his position to pass on internal HYBE information to ADOR. He was in charge of IR (Investor Relations) at HYBE's finance department and transferred to ADOR earlier this year. Apart from Mr. A, the ADOR board members appointed on April 25, 2023, are close associates of CEO Min, referred to as the "Min Hee Jin faction."

ADOR has been considered the most promising agency among HYBE's sublabels. After CEO Min debuted her first girl group NewJeans in 2022, ADOR's revenue surged from 18.6 billion KRW (~13.5 million USD) to 110.3 billion KRW (~80 million USD) in just one year, showing nearly 100 billion KRW (~63 million USD) growth in revenue from just one group.

News of the sudden 'coup' by ADOR, which has experienced rapid growth in a short period, affected HYBE's stock price. If ADOR becomes independent, one of the main pillars of HYBE Labels would be lost. Following the announcement, HYBE's stock price quickly fell by more than 10%, causing a temporary halt in trading due to the sudden drop. By the end of the day, HYBE's stock had fallen 7.81%, closing at 212,500 KRW (154.27 USD), which is 18,000 KRW (13.06 USD) lower than the previous day.

HYBE is reported to be analyzing the digital assets secured through the audit to take legal action if necessary.

Min Hee Jin joined SM Entertainment through open recruitment in 2002 and oversaw the visual direction of groups like Girls' Generation, SHINee, f(x), EXO, and Red Velvet. After leaving SM Entertainment in 2018 and transferring to HYBE the following year, she became the CEO of ADOR in November 2021, successfully debuting her first girl group NewJeans in 2022, elevating them to the ranks of 'K-pop's leading girl groups.'

Korean netizens responded:

"I think the takeover would have been possible if she had more shares in ADOR."

"She definitely went over her head because people kept saying she's a genius, she's a genius."

"She was getting too greedy."

"Her greed for money is endless."

"If she just stayed still, she would've naturally gotten more shares in the company."

"This is a Coup attempt for sure."

"How did she even think about doing a coup against such a big company?"

"ADOR would do better if they stay with HYBE though."

"Her image is going down the drain."

"If she fails, it's jail. If she succeeds, she will be chairwoman. lol"

"Is this the second FIFTY FIFTY?"