Five months after tensions first arose between HYBE and former ADOR CEO Min Hee Jin, the conflict has escalated with NewJeans now entering the fray, throwing the situation into further turmoil. The members of NewJeans issued an ultimatum, demanding Min Hee Jin’s reinstatement within two weeks. Observers speculate that NewJeans may even be considering terminating their exclusive contract with HYBE, with growing market interest in potential penalty fees and their scale.

The incident that led to NewJeans losing trust in HYBE was a controversy involving a greeting with the manager of another group. This dates back to June, about three months ago, shortly after Min Hee Jin had won a legal battle against HYBE. On a YouTube live broadcast on the evening of September 11, NewJeans member Hanni detailed the situation, explaining that a HYBE manager had instructed other members to "ignore her." This appears to refer to an incident involving the manager of ILLIT.

Concerned about potential workplace bullying, the parents of NewJeans informed ADOR and HYBE’s management of the issue at the time, requesting a smooth resolution. However, both sides interpreted the situation differently, and the conflict remained unresolved. HYBE reviewed 7-8 minutes of CCTV footage from the incident and stated that it showed Hanni and the ILLIT members exchanging greetings, with no problematic statements from the manager.

The issue raised by NewJeans’ parents didn’t gain traction internally due to insufficient evidence. However, insiders in the music industry believe that given the previous tensions between HYBE and Min Hee Jin, this could have escalated into a subtle emotional battle.

Three months later, when Min Hee Jin was dismissed from her CEO position, the members of NewJeans took action. Previously, the parents of NewJeans members had disclosed that HYBE chairman Bang Si Hyuk had repeatedly ignored their greetings. HYBE responded by suggesting that Bang might suffer from prosopagnosia (face blindness).

NewJeans then made a bold move, issuing a demand for Min's reinstatement within two weeks. Given the specific deadline, there is speculation that they may be considering legal action against HYBE.

Industry insiders see it as increasingly likely that NewJeans will pursue a lawsuit to terminate their exclusive contract. Such cases typically involve the artist informing the agency of their demands, and if no resolution is reached within a certain period, the artist can file for an injunction to suspend the contract. In this case, if NewJeans' demand for Min’s reinstatement is not met within two weeks, it could trigger a legal battle.

The possibility of contract termination was already considered a potential outcome when Min Hee Jin was dismissed from her CEO role last month. Min's side had expressed their intention to review follow-up actions, calling her dismissal a violation of the shareholders' agreement and the court’s decision.

A source commented, "After experiencing the ‘greeting controversy,’ NewJeans' trust in HYBE has severely deteriorated, aligning them with Min Hee Jin. Through this latest live broadcast, they’ve made it clear that they are siding with Min Hee Jin, effectively crossing a point of no return with HYBE."

NewJeans' demand for Min Hee Jin’s reinstatement is unlikely to be accepted, especially since HYBE has already filed a complaint against Min Hee Jin for breach of trust. Given the current level of conflict, the chances of reconciliation appear slim.

If a lawsuit does proceed, the key issue will be the penalty fees. According to the Fair Trade Commission's standard contract, the penalty for contract termination is calculated by multiplying the monthly average revenue of the past two years by the number of months remaining in the contract. Based on this formula, NewJeans' potential penalty is estimated at around 300 billion KRW ($224 million). However, it is unlikely that NewJeans will choose to pay the penalty and leave the company.

Another source noted, "NewJeans is likely focusing on building a case to exit the company without paying penalties, while HYBE is gathering evidence to support their claim that Min Hee Jin's 'tampering allegations' were the root cause of the conflict." HYBE has accused Min of planning to recruit external investors, make ADOR independent, and take NewJeans with her.

Following NewJeans' involvement in the dispute, HYBE's stock fell by 6% during the day, closing 2.82% lower at 169,000 KRW (125.58 USD) per share.

SEE ALSO: Former ADOR CEO Min Hee Jin shares cryptic social media post amid legal battle against HYBE