HYBE vs ADOR: why are the K-Pop giants battling one another and why have NewJeans been audited?

It’s perhaps the biggest talking point in the K-Pop world since the mystery of BLACKPINK’s future was answered; why are HYBE, one of the biggest K-Pop agencies in the world, at war with ADOR - a subsidiary of the agency and home to current K-Pop superstars NewJeans?

It led to a press conference taking place overnight in South Korea, where ADOR CEO Min Hee-jin addressed a number of the accusations levied against herself by HYBE; in particular, that she took on the managerial rights for “greed” and that HYBE deliberately debuted LE SSERAFIM before NewJeans solely because the latter were selected through a HYBE audition to be their first girl group.

"It doesn't make any sense that I stole management rights for money. I have contracted shares already, and there's a lot I received that I cannot disclose. The different points released by HYBE are all advantageous to them. The details are false from my point of view." 

"The NewJeans members called me last night and cried for 20 minutes. They felt sorry for me and cried a lot. The mother of the members also said 'The public opinion turned upside down, and it's right before the president's execution,' so she told me I should tell everything." 

"I don't have to take care of NewJeans anymore. I don't have this desire. What do I do with NewJeans? It's nothing like that. NewJeans is really like my child, so I feel that way. It's so sad to leave my children at HYBE and leave."

So how did we get to the point where the CEO of a major K-Pop agency is holding a press conference regarding the “power struggle.”

Why are HYBE and ADOR in a power struggle?

HYBE has alleged that executives at ADOR, including Min Hee-jin, are trying to take control of the agency by allegedly leaking confidential information to attract investors and induce HYBE to sell its ownership. 

Additionally, HYBE alleges that there have been plans to usurp control of the company, and they have claimed to have secured evidence of these plans during an internal audit of ADOR. ADOR's management, on the other hand, claims that the evidence found by HYBE consists of personal reflections on long-standing conflicts between the two companies

ADOR was founded as a wholly-owned subsidiary of HYBE in 2021, however, HYBE's stake in ADOR has since decreased to about 80%, as CEO Min Hee-jin acquired roughly 18% of the company in 2023. The remaining 2% is held by other executives of the company

The initial dispute between HYBE and ADOR seems to stem from allegations that ADOR executives, including CEO Min Hee-jin, were attempting to take control of the K-pop agency and possibly induce HYBE to sell its ownership stake in ADOR.

What has led to the NewJeans audit?

HYBE appears to have taken the first action against ADOR when it initiated an audit against some executives of ADOR due to suspicions that they were trying to take control of the K-pop agency and suspected ADOR executives of leaking confidential information and working to usurp control of the agency.

Reports suggest that HYBE's audit team initiated an investigation against Min Hee-jin and an unnamed executive over the alleged leaking of confidential information to attract investors and manipulate HYBE to relinquish its control of the agency

This audit was launched after HYBE suspected ADOR executives of leaking confidential information and working to usurp control of the agency.

NewJeans' net worth and financial success were brought up in the context of the ongoing dispute between HYBE and ADOR. ADOR released documents that revealed the earnings of NewJeans members in 2023, which highlighted how financially successful the group has been. 

Each member of NewJeans was reportedly paid KRW5.2 billion (roughly USD3.7 million) in 2023, showing that the girl group has been a major source of revenue for ADOR and the importance of NewJeans as a leading act in the industry. 

Have HYBE or ADOR discussed what they want to see as a resolution?

ADOR would likely prefer a resolution that preserves its autonomy and ability to operate effectively, without undue interference from HYBE. ADOR may also want to maintain its creative control, particularly given Min Hee-jin's successful track record with NewJeans and other projects. 

However, ADOR may need to address HYBE's concerns regarding governance and transparency to reach a mutually acceptable resolution.