Hybe Stock Dips Amid Reported Spin-Off Dispute With Its Ador Subsidiary, the Label Behind NewJeans

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ador hybe dispute
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NewJeans, which last year reached one billion Spotify streams faster than any other K-pop act, has found itself at the center of a dispute between Ador and its Hybe parent. Photo Credit: TenAsia

BTS agency Hybe is embroiled in a dispute with Ador over the subsidiary’s alleged attempt to spin off into a standalone company.

Regional outlets including the Korea Times just recently shed light on the confrontation, complete with a Hybe-ordered audit of Ador (short for “All Doors One Room”) and a push to remove the business’s CEO. For background, Hybe possesses an 80 percent interest in Ador, which serves as the professional home of two-year-old girl group NewJeans.

Running with the mentioned report, Universal Music-partnered Hybe initiated an audit into Ador execs including CEO Min Hee-jin (who owns the remaining 20 percent stake) due to the spin-off allegations. That process reportedly entailed searching computers in Ador’s headquarters for proof, and this effort seemingly turned up at least some of the sought evidence.

To be sure, Hybe’s now expected “to initiate legal proceedings against Min,” per the Korea Times. Beyond the spin-off allegations, a Hybe official has claimed that Ador’s CEO is suspected of attempting to sell shares in the company and disclosing confidential information (about Ador as well as Hybe) to third parties without authorization, per the Times.

Min Hee-jin doesn’t appear to have stepped down as Ador’s CEO despite the push from Hybe. And though the subject’s received far less media attention than Hybe’s remarks, the former SM Entertainment team member refuted the allegations (regarding the purported takeover attempt and more) in an interview.

According to Google’s translation of the Korean-language discussion, Hybe only initiated the audit and went public with the allegations after Ador raised concerns about perceived creative and image-related overlap between its NewJeans and Illit. The latter is a new K-pop girl group developed this time by Belift Lab, another Hybe subsidiary.

More problematic than the alleged sequence of events is the position of Ador and NewJeans itself. As Ador sees it, Hybe and Belift are at fault and should acknowledge as much to the media, per the text.

Additionally, even if its CEO is compelled to exit, Ador, having expressed the reservations following “sufficient discussion with NewJeans members and legal representatives,” will “utilize all possible means and methods to prevent further infringement due to copying.” Reading between the lines, one needn’t stretch the imagination to see why NewJeans’ members are likely opposed to the ouster of Min Hee-jin, who reportedly formed, trained, and directs the five-piece act.

At the intersection of these points and the commercially prominent NewJeans’ substantial contribution to Hybe’s financials, investors are less than thrilled with the situation. When the market closed today, Hybe stock (KRX: 352820) was down almost eight percent, at $154.14 (₩212,500) per share.