Min Heejin, CEO of ADOR, is embroiled in multiple lawsuits, including defamation and obstruction claims from Source Music and Belift Lab, and a critical embezzlement accusation from parent company HYBE. Despite winning a court ruling to maintain her position, the most severe threat is HYBE’s attempt to dismiss her “for cause,” which could void her shareholder agreement and significant financial compensation. The final resolution of these disputes hinges on court decisions and potential reconciliation efforts.
Legal Victory Maintains CEO Position
The CEO of ADOR, Min Heejin, remains in her position following a court ruling in her favor on May 30, which prohibited her parent company, HYBE, from exercising its voting rights against her. This victory, however, has not put an end to her legal troubles.
Defamation and Obstruction Lawsuits from Source Music and Belift Lab
On July 15, Source Music, the agency behind LE SSERAFIM, filed a lawsuit against Min Heejin, demanding compensation of approximately 500 million KRW (around 380,000 USD) for defamation, obstruction of business, and insult. Previously, on June 10, Belift Lab, the agency for ILLIT, also accused Min Heejin of business obstruction and defamation, adding a civil lawsuit to their charges. These legal challenges have left Min Heejin entangled in ongoing disputes.
The Critical Accusation of Embezzlement by HYBE
Among these legal issues, the most severe threat comes from HYBE’s accusation of embezzlement against Min Heejin, filed on April 26. Despite HYBE’s claim that Min Heejin attempted to seize managerial control, proving embezzlement is challenging due to South Korean law, which does not penalize attempted embezzlement.
The Impact of the Shareholder Agreement
The significance of HYBE’s accusation lies in the shareholder agreement Min Heejin signed with HYBE in March 2023. This contract stipulates an obligatory service period until November 2026. Upon completion, Min Heejin could sell her 18% stake in ADOR to HYBE for approximately 100 billion KRW (around 72,216,000 USD), based on this year’s valuation. However, HYBE may have safeguards to ensure this option is only valid if she remains with ADOR for the agreed period. If she is dismissed “for cause,” HYBE could avoid paying the hefty sum, potentially leaving Min Heejin without compensation.
Min Heejin’s Defense: Contesting the Shareholder Agreement
Min Heejin’s defense centers on the claim that the shareholder agreement is a “slave contract.” According to her, selling 4.5% of her shares requires HYBE’s consent, which, if withheld, perpetuates a non-compete clause as long as she holds any shares. This could essentially bind her indefinitely to HYBE’s conditions. Min Heejin might contest the validity of the non-compete clause in court, arguing that such terms amount to a lifetime contract, thus invalidating the shareholder agreement.
The Possibility of Reconciliation and the Future of the Legal Battles
Given these circumstances, Min Heejin hinted at reconciliation with HYBE during a second press conference on May 31. However, HYBE has yet to respond, suggesting that an amicable settlement is unlikely. Ultimately, the outcome of Min Heejin’s three lawsuits, particularly the one involving HYBE, depends on the court’s decisions and her legal strategy in facing these challenges.
I appreciate you taking the time to read this post. Please share your thoughts in the comments!
Great breakdown of Min Hee-jin’s legal troubles. This was an eye-opener for me!