The Hybe Co. headquarters in Seoul, South Korea on Feb. 19, 2023.
SeongJoon Cho | Bloomberg | Getty Photos
South Korea’s largest leisure company Hybe is about to file an official police criticism towards executives of its sublabel ADOR on prices of breach of belief and different offenses.
The transfer comes after Hybe, which manages Ok-pop sensation BTS, opened an audit into ADOR on April 22 over allegations that CEO Min Hee-jin was aiming to take the sublabel impartial. A Hybe assertion despatched to CNBC stated the corporate additionally referred to as for Min to step down.
Min denied the allegations and accused Hybe of copying the idea of ADOR’s lady group, NewJeans, for one more lady group beneath a unique Hybe subsidiary.
Hybe additionally advised CNBC that it has substantial proof that Min sought to grab management of the sublabel, stating that “the proof included detailed discussions that Min has ordered the ADOR administration to search out methods to strain HYBE into in the end promoting ADOR’s shares.”
Studies from South Korean media present a screenshot offered by Hybe of a message between Min and ADOR’s vice CEO. Within the message, the vice CEO outlined varied strategies to take the label impartial, together with approaching different buyers and convincing Hybe to promote its stake within the sublabel.
Hybe added that one of many audited events “submitted data belongings to grab the administration of ADOR and to aim to contact exterior buyers. The auditee additionally admitted to creating the paperwork to assault Hybe.”
When the announcement of the audit broke Monday, shares of Hybe slid 8%, marking its largest fall in seven months. The inventory was little modified Thursday.
Hybe holds an 80% stake in ADOR, with Min holding 18% and different executives splitting the remaining 2%.
The event additionally comes as NewJeans is poised to come back again with a brand new single on Could 24.
Hybe stated it is going to proceed to supply look after the group and assist its upcoming comeback, in addition to meet the members’ authorized representatives to debate how one can shield the group.
Multi-label
The event is a blow to Hybe’s “multi-label technique,” the place the company homes a number of impartial labels to “make sure that all kinds of music and content material are created.”
That is in distinction to conventional Ok-pop companies, which maintain all their artists in the identical secure and depend on a couple of main names for development.
In a 2022 launch, Hybe stated that “we look ahead to their development by means of mutual cooperation and, at instances, even wholesome competitors.”
Final yr, Bernstein additionally recognized this as one in every of Hybe’s strengths in an investor word. The income and development from different sublabels allowed the corporate to make up for BTS’ hiatus resulting from South Korea’s necessary navy service, the agency stated.
In distinction, shares of rival YG Leisure fluctuated wildly after members of Blackpink didn’t re-sign their particular person contracts with the company.
— CNBC’s Chery Kang contributed to this report.