South Korea’s biggest K-pop agency Hybe accuses sublabel executives of breach of rely on

South Korea’s largest leisure agency Hybe is established to file an official law enforcement criticism versus executives of its sublabel ADOR on rates of breach of have confidence in and other offenses.

The go will come following Hybe, which manages K-pop sensation BTS, opened an audit into ADOR on April 22 in excess of allegations that CEO Min Hee-jin was aiming to take the sublabel unbiased. A Hybe assertion despatched to CNBC said the enterprise also identified as for Min to stage down.

Min denied the allegations and accused Hybe of copying the principle of ADOR’s female group, NewJeans, for yet another lady group underneath a distinctive Hybe subsidiary.

Hybe also informed CNBC that it has substantial evidence that Min sought to seize manage of the sublabel, stating that “the proof provided comprehensive discussions that Min has requested the ADOR management to find techniques to tension HYBE into in the end selling ADOR’s shares.”

Experiences from South Korean media clearly show a screenshot supplied by Hybe of a message among Min and ADOR’s vice CEO. In the concept, the vice CEO outlined a variety of strategies to choose the label unbiased, together with approaching other investors and convincing Hybe to sell its stake in the sublabel.

Hybe extra that 1 of the audited parties “submitted details belongings to seize the management of ADOR and to attempt to make contact with external investors. The auditee also admitted to creating the documents to assault Hybe.”

When the announcement of the audit broke Monday, shares of Hybe slid 8%, marking its biggest slide in seven months. The inventory was very little modified Thursday.

Hybe holds an 80% stake in ADOR, with Min holding 18% and other executives splitting the remaining 2%.

The progress also comes as NewJeans is poised to come again with a new solitary on Might 24.

Hybe claimed it will continue to provide treatment for the group and guidance its impending comeback, as properly as meet up with the members’ legal associates to discuss how to safeguard the group.

The enhancement is a blow to Hybe’s “multi-label system,” exactly where the company houses multiple impartial labels to “ensure that a extensive variety of audio and material are designed.”

This is in contrast to classic K-pop agencies, which keep all their artists in the exact same steady and count on a several main names for expansion.

In a 2022 release, Hybe said that “we glimpse ahead to their development by means of mutual cooperation and, at moments, even healthy competitors.”

Past 12 months, Bernstein also discovered this as 1 of Hybe’s strengths in an trader note. The revenue and growth from other sublabels authorized the company to make up for BTS’ hiatus owing to South Korea’s mandatory armed forces service, the firm reported.

In contrast, shares of rival YG Leisure fluctuated wildly following members of Blackpink did not re-indication their individual contracts with the agency.

— CNBC’s Chery Kang contributed to this report.