Legal experts, as reported by The Law Times on May 1st, anticipate a potential legal dispute over the contract between Chairman Bang and CEO Min that could result in hundreds of billions of won in penalty fees.
ADOR has announced that they have scheduled a board of directors meeting and a shareholders’ meeting for the month of May. According to ADOR’s legal representative, Lawyer Lee Won (Sejong Law Firm), the board of directors meeting is set to take place by May 10th, with the shareholders’ meeting to follow by the end of the month, as previously planned.
The Seoul Western District Court scheduled an interrogation date for April 30th to discuss HYBE’s request to hold an interim shareholders’ meeting regarding the dismissal of ADOR CEO Min Hee-jin. The interrogation was conducted with permission from the court.
Based on reports from the media, the shareholder contract signed by CEO Min with HYBE states that her term of office is mandatory until November 2026. In the contract, it is stated that CEO Min has the option to sell her 18% ownership in ADOR to HYBE for a value equivalent to 13 times the average operating profit of the current and previous year at the time of sale, divided by the total number of issued shares.
According to reports, CEO Min Hee-jin suggested an amount 30 times larger than the original proposal, rather than just 13 times larger.
From the end of this year, Min Hee-jin will have the option to exercise 13.5% of her shares in HYBE. It is probable that the terms of her contract stipulate that she must remain with the company for the duration of the required employment period in order to exercise these options. As a result, if Min Hee-jin is terminated during this period, HYBE stands to save approximately 100 billion won from the amount that would have been paid to her at the shareholders’ meeting.
Despite legal circles believing that Min Hee-jin will not be charged with breach of trust, HYBE remains confident that the charge will be proven. They cite documents that allegedly show Min Hee-jin’s potential gains through put options, as well as specific information on legal cases, investment firms, and public relations campaigns. Additionally, the company stresses that the main issue at hand is not breach of trust, but rather a dispute over money and management rights.
There is a potential for future conflicts to arise, and it is possible that NewJeans, currently managed by ADOR, may side with Min Hee-jin and seek a court order to terminate their exclusive contracts with HYBE. In the event that HYBE’s stock price decreases due to the tarnishing of NewJeans’ image, the financial repercussions could range from hundreds of billions to thousands of billions of won.
Despite the fact that CEO Min Hee-jin publicly swore at HYBE executives during her press conference, the company has only filed charges against her for breach of trust. While she could potentially be sued for defamation or insult, this course of action should be approached with caution, as the main issue at hand is the management of money and rights.
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