Hybe vs. Min Hee-jin: Battle Over 26 Billion Won Put Option Intensifies in Court

The legal dispute between Hybe and ADOR CEO Min Hee-jin over the exercise of a put option worth approximately 26 billion won (US$18.7 million) entered its second round of hearings on Tuesday.

The Seoul Central District Court's Civil Division 31 is simultaneously presiding over Min's lawsuit demanding payment for the stock sale and Hybe's lawsuit seeking confirmation of shareholder agreement termination. Min was present in court, while Hybe's Chief Legal Officer (CLO) Jung Jin-soo testified as a witness.

Jung described the shareholder agreement between Hybe and Min as an "exceptionally generous compensation package," noting that the multiplier offered was typically reserved for scenarios involving the sale of the entire company or additional stakes. He explained that the agreement also included clauses to prevent issues with the governance structure of the multi-label system, which Hybe was expanding at the time.

Addressing Min's claims of an "enslavement contract," Jung stated he disagreed with the characterization, emphasizing the highly favorable compensation terms. He revealed that Min had requested the put option exercise price be raised from a 13x to a 30x multiplier and sought enhanced executive powers, including sole authority to terminate exclusive contracts and enter into external service agreements.

Jung argued that a 30x multiplier could result in Min receiving more money than the company's revenue, deviating from the purpose of a put option, which is performance-based reward. He expressed concern that such extensive powers could lead to an unchecked executive, drawing parallels to potential 'tempering' issues.

Hybe's suspicions reportedly began around February 2024, following a tip from an outside director. Further concerns arose in March with reports of Min requesting private meetings and allegations of her subordinate spreading false rumors about 'poaching' Hybe artists to securities firm analysts. An email sent to NewJeans' parents, which Min claimed was a protest, was viewed by Hybe as an attempt to escalate the conflict and potentially lure the artists away.

Jung also testified about Min's alleged efforts to secure investment from a Japanese investor around the end of last year and early this year. He mentioned that Min had shared a legal opinion from a Korean law firm, translated into Japanese, regarding NewJeans' exclusive contract, which favored a favorable outcome for Min in a potential injunction.

Min's side strongly contested Jung's testimony, calling it "full of lies" and maintaining the validity of the put option. The court is expected to scrutinize the enforceability of the put option and the legality of the contract termination in upcoming hearings.

Min Hee-jin, a prominent figure in K-pop, previously worked at SM Entertainment for 15 years, shaping the concepts for groups like Girls' Generation and EXO. She later joined HYBE, where she established ADOR and successfully launched the girl group NewJeans. Known for her distinctive artistic direction and innovative approach, Min has cemented her reputation as a visionary producer in the global music industry.