Did HYBE Misappropriate 4 Billion Won From NewJeans for Its Gaming Subsidiary?

On October 21, a thread titled “Internal Transaction of 4 Billion KRW Between HYBE IM and ADOR in Settlement Dispute (NewJeans Issue)” emerged on the Korean forum theqoo.

This discussion highlighted a news report about a questionable monetary transfer from ADOR to HYBE IM, the gaming arm of the conglomerate.

Particularly, the article referenced insider information indicating that a total of 4.2 billion KRW (around 3 million USD) in internal financial transactions occurred between ADOR and HYBE IM in the third quarter of this year.

Of this amount, HYBE IM reported 4.1 billion KRW (approximately 2.9 million USD) as revenue from ADOR, while ADOR acknowledged only 90 million KRW (about 65,000 USD) coming from HYBE IM.

Both companies attributed the transactions to royalties from gaming; however, there are rising concerns that HYBE could be inflating its new business income by utilizing the success of ADOR, which has benefited significantly from NewJeans.

In typical scenarios where an artist under the HYBE label features in a game, revenue from royalties should be recognized by the label. However, in this unusual case, ADOR appears to be compensating HYBE IM for gaming services rendered.

In August, HYBE IM integrated NewJeans into its game “Rhythm Hive.” Given that ADOR oversees NewJeans and that HYBE IM utilized their intellectual property, it was expected that ADOR would account for the revenue.

One industry expert remarked, “HYBE is attempting to extract tens of billions of KRW in quarterly earnings from ADOR, while HYBE IM, not yet on stable ground, is recording revenue under dubious circumstances. If this pattern continues, it risks diminishing the settlements due to the artists, potentially creating more significant problems.”

When asked about the matter, a representative from HYBE commented, “It’s challenging to verify specific aspects concerning internal transaction disclosures.”

This situation has led many netizens to speculate that HYBE may be misappropriating funds from NewJeans’ management company to inflate its gaming subsidiary’s earnings.

Here are some netizen reactions:

Wow… So that’s the reason behind trying to remove Min Hee-jin. It seems they want to have the freedom to allocate funds as they please.
They seemed to be searching for a leader who would comply without objection, but Min Hee-jin pushed back, making her a target for removal.
It appears they prioritized the interests of label executives while siphoning profits meant for the artists.
This feels extremely shady.
I believe that ADOR has managed remarkably well despite such an operation.

Source: theqoo

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