HYBE has responded to ADOR CEO Min Hee Jin's press conference in a new statement.

Min Hee Jin made a number of claims against HYBE in her recent press conference, revealing HYBE founder Bang Si Hyuk's text messages to her and more. Read HYBE's detailed statement addressing the matters below.

"Hello. This is HYBE.

We would like to clarify some points in response to the remarks made by ADOR's CEO Min Hee Jin at a press conference that was held on April 25 for the protection of shareholder value and intellectual property (IP).

1. On the claim the takeover of management rights was a joke or casual conversation

Records of discussions held over several months on the topic are recorded in transcripts and work logs. Casual conversation that occurs repeatedly over a long period of time with the involvement of third parties is no longer 'casual conversation' but becomes a plan to execute. Moreover, the vice president who the conversations were held with is a certified public accountant with professional knowledge of corporate governance who conducted HYBE's IPO duties and numerous M&As. He is also a core executive of ADOR in a position to access all of the company's financial information. The vice president even noted the CEO's remark of 'ultimately leaving HYBE' in the work log. It cannot be considered a joke.

It cannot be dismissed as jokes when several documents calculated the amount that could be obtained by exercising put options, specifically stating the timing of action, and mentioning terms like infringement lawsuits, investors, and battle of public opinion have already been found. There is even a record of [Min Hee Jin] telling the vice president, 'This will have to be noted as casual conversation.'

2. On the claim that monetary compensation was not enough

CEO Min claimed her salary is 2 billion won ($1,453,721.60 USD). Accurately, the incentive for her 2023 performance is 2 billion won, and her salary and long-term incentives are calculated separately. This salary is the highest among all individuals who work at HYBE headquarters and the Korean subsidiaries.

HYBE also provided substantial stock compensation aside from the salary. The value of her stocks is very large to the extent that it cannot be imagined by normal people. Nevertheless, CEO Min proposed an amount that the company could not accept and led the negotiation to a disaster. We see this process as her setting up a pretext to gain independence of management rights.

3. On the claim the audit began immediately without a response to the whistleblowing email

We sent a detailed 6-page-long in A4 size response on April 22 at 10:01 a.m., and it is confirmed that CEO Min read the reply at about noon the same day the email was sent. However, CEO Min keeps insisting in her statement and at the press conference she did not get an answer.

The audit was conducted after recognizing attempts to seize management rights over several months through internal and external information and confirming documents considered confidential business information were leaked. It is absurd to argue the audit schedule for serious misconduct should be notified in advance.

4. On the claim there was no guidance in terms of returning information assets

As part of the audit process, we visited [Min Hee Jin's] residence and studio located in Mapo District, Seoul, to retrieve information assets on April 22 at 10:00AM. Despite several attempts to contact CEO Min via landline phone, email, and mobile phone messages, she did not respond. After the return deadline expired on April 23 at 6:00PM, we requested the return of information assets through ADOR's Vice President Shin. Vice President Shin replied, 'CEO Min is too busy to do so.' [Min Hee Jin's claim] she found out about the return of information assets through the media and saying it's media play is an irresponsible lie.

The claim we took away computer assets, so that she could not work before [NewJeans'] comeback is also a lie. As soon as we get the returned laptop, we provide a new laptop and allow the download of all previous data so work is not disrupted. Other auditees are working with new devices that we have provided as well.

5. On the claim we promised to debut [NewJeans] as our first girl group

This is part of why we have already answered in detail in the email sent to CEO Min on April 22. We suspect the reason why CEO Min claims she did not receive an email is because she cannot make provocative and false claims if she has read the email. We sent the detailed answer below.

'CEO Min is making false claims based on your own distorted way of interpretation about the separation from Source Music. The reason NewJeans could not debut as HYBE's first girl group is not because HYBE did not keep our promise. At the time, you strongly insisted you would debut [NewJeans] under your own separate label while requesting to form a team under your responsiblity. HYBE respected your opinion and transferred the members to ADOR despite the opposition of Source Music and provided funds amounting to 16 billion won ($11,627,315.20 USD), so NewJeans could debut in the way you wanted. In this process, NewJeans' debut schedule could not help but be delayed regardless of HYBE's intention due to company's division and the transfer of contracts.

Moreover, you yourself revealed this process before. In an interview with a media outlet on March 24, 2022, you directly mentioned the girl group project will proceed under your plan and the launch will be in the third quarter of 2022. You even remarked, 'A rushed debut can only be a big burden on young members. I don't want to make everyone feel rushed, so I set the third quarter of 2022 as the launch time.'"

6. On the claim she was told to not promote NewJeans at debut

Due to the R&R (roles and responsibilities) dispute between Source Music and CEO Min, NewJeans' debut schedule got delayed, and Source Music's LE SSERAFIM debuted first. As there was not adequate time for the two groups' promotions because their debut schedules followed one after the other right away, it was decided the minimum promotional periods would be set. In addition, in the case of LE SSERAFIM member Sakura, articles about her 'transferring to HYBE' had been pouring out even before she signed with HYBE. In the midst of this situation, if we promoted ADOR's debut group as 'a team composed only of rookies,' there were concerns the fact that Sakura joined Source Music as well as information regarding the composition of NewJeans members would be exposed. We made this request to protect the news value of both teams, and even then, we shortened the period in the middle and started promoting NewJeans early.

Regarding this, we also included our response in the email as follows:

'Also, the time when CEO Min's interview took place was two months before the debut of LE SSERAFIM (May 22, 2022), so it can be recognized that you already had plenty of time to promote her new girl group.

Your claim differs greatly from the perception of staff members who know how much support and compromise Source Music and HYBE provided for the success of ADOR.'

7. On the claim HYBE is neglecting the promotion of NewJeans

We already answered this claim in detail in the reply to the email she sent.

'The HYBE Communication Organization is putting in full effort for the promotion of NewJeans. Last year, 273 press releases were written and distributed for NewJeans alone. Compared to the 659 press releases for Big Hit Music, which operated a total of eight teams including BTS as a group and individually, and 365 press releases for Pledis Entertainment, which operated four teams including Seventeen, it is difficult to claim 'we've been neglecting promotion of NewJeans only.' Our PR is promoting all labels and artists without discrimination and doing their best to promote them.'

8. On the claim of a slave contract

The non-competition clause in the shareholder agreement has a duty of confidentiality but was mentioned at the press conference by CEO Min. The non-competition clause is requested by shareholders to prevent unfair competition from a majority shareholder setting up a business in the same industry after selling their shares. It is a common clause in any industry.

It is also not true to say she is tied up forever. CEO Min can sell her stocks beginning this November, and if she sells the stocks, she will not be subject to the non-competition clause from November 2026 when her employment contract with our company expires.

It is impossible to call it a slave contract when CEO Min is guaranteed a large amount of money to the point that she herself expressed 'I can make 100 billion won ($72,692,420 USD) just by staying still,' and when there is the condition that she can cash in and start a business by the year after next year. These are unconventional compensation conditions normal people cannot even imagine.

Even in the KakaoTalk conversation CEO Min had with confidants, it's stated she can exercise the put option on January 2, 2025 and 'exit.'

In terms of the clauses about selling stocks in the contract CEO Min is claiming to be a slave contract, there was a difference in interpretation of the priority order of the two clauses, and we already sent her a reply in December of last year, saying, 'If the interpretation is ambiguous, we can settle the ambiguous provisions by modifying them, so that there is no issue.' CEO Min said, 'I'm not interested in money,' but the core issue that triggered the discussion was the scale of compensation.

9. On the claim telling us to do ESG management

Our company is fulfilling ESG management activities within the scope we can carry out. In terms of the eco-friendly album the company has worked hard to push forward with, CEO Min spoke down on it, saying, 'melting photocards is nonsense.' The company had to invest considerable manpower and expenses to convert the plastic material of the digital album to paper and to convert the album case and photo card to environmentally friendly biodegradable material. Accepting this willingly and investing in this is ESG management. We are promoting the expansion of eco-friendly albums to all labels under HYBE, but the most uncooperative label is ADOR, which internal staff members know.

10. On the claim there was no attempt for a conversation

HYBE continuously discussed CEO Min regarding changes to the shareholder agreement, but the discussion was suspended when CEO Min's inquiry claimed to be 'whistleblowing' arrived at HYBE. Nevertheless, HYBE sincerely responded about the matter claimed by CEO Min as 'whistleblowing.' However, it was confirmed through the audit that CEO Min secretly took in HYBE's internal lawyers and accountants to be consulted on changing the shareholder agreement and raising issues in the form of whistleblowing during the period when the shareholder agreement negotiation was in progress, and she contacted law firms and institutional investors, etc. to discuss the takeover of management rights.

11. On the claim the shaman is just a friend

An outsider involved deeply in overall management cannot be viewed as simply a friend.

In the conversation [between Min Hee Jin and the shaman], undisclosed executive stock option amounts along with the management takeover structure including names of potential investors and each investor's shareholding percentage have been exchanged. Decisions on management issues were made based on the shaman's proposals. We cannot regard this kind of conversation partner as simply an acquaintance. The company takes it seriously that important company information is being indiscriminately shared with outsiders, who are getting involved in decisions, and that she has also received hiring requests.

12. Why during the comeback period? On the claim HYBE does not cherish NewJeans

CEO Min's side is the side that began attacking the company through email around the time of NewJeans' comeback. Records secured through forensics include instructions from CEO Min since April to prepare for a battle of public opinion along with records of creating noise to torture the company. We question whether they thought the company would accept a compensation request that borders on unreasonable if they pressured the company at the time.

CEO Min's side is the one that's actually threatening the company using the artists as hostages. If the compensation request is accepted, it's good, and if not, they intend to use it as a pretext to end the relationship.

Throughout the years, our company accommodated and compromised with CEO Min's repeated requests. However, this time we realized the requests are part of the so-called 'build-up' process to take over management, and we had no choice but to hold an audit to protect the multi-label's value regardless of timing. The reason we requested that she not mention the artist in press conferences and interviews is because we are concerned about the artist's worth."

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