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HOW HYBE MANAGED TO FIRE MIN HEEJIN
🕑 Added 2024-08-28 06:16:51 +0000 UTCi'll clarify tomorrow if you have questions, i'll do a live stream, 9:30pm. Am experimenting what is the best time for a live stream so for about a month, i'll try other times and see what's is optimal.
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HYBE notified Min Hee-jin, the former CEO of ADOR, of the termination of the shareholder agreement between HYBE and herself in July.
The shareholder agreement between HYBE and Min Hee-jin included provisions for a guaranteed term as ADOR's CEO and a put option (the right to demand the sale of stock).
As long as the shareholder agreement was in place, HYBE was obligated to use its voting rights at the general shareholders' meeting to ensure Min Hee-jin maintained her position as CEO and an inside director of ADOR until November 2026. Additionally, Min Hee-jin had the right to request HYBE to purchase up to 75% of her ADOR shares within a window of 3 to 10 years from the date of ADOR's establishment.
In July, HYBE notified Min Hee-jin of the contract's termination and filed a lawsuit to confirm the termination in court. With the dissolution of the shareholder agreement, Min Hee-jin also lost her put option rights, which were valued at 100 billion won. This amount was the same that Min Hee-jin referenced during her first emergency press conference, where she stated, "I can earn 100 billion won just by sitting still."
ADOR posted a deficit of approximately 4.13 billion won in the year New Jeans debuted, primarily due to significant initial investment costs before their July launch. However, by 2023, the year following New Jeans' debut, ADOR turned a profit, reporting an operating profit of around 33.5 billion won, thanks to New Jeans' rapid rise in popularity. If ADOR continues to grow at this pace, the company is expected to earn around 70 billion won in 2024. Had Min Hee-jin been able to exercise her put option, she could have anticipated a profit of 90 to 100 billion won.
Min Hee-jin remained as CEO after the court accepted MHJβs application for an injunction to prohibit the exercise of voting rights. However, this injunction only applied to Min Hee-jin herself, resulting in the dismissal of her close executives. These positions were then filled by HYBEβs CHRO (Chief Human Resources Officer), CSO (Chief Strategy Officer, and current HYBE CEO), and CFO (Chief Financial Officer) Lee Kyung-joon.
With all inside director positions now held by HYBE, the companyβs board convened and decided to replace the CEO. The board appointed Kim Joo-young, an inside director, as the new CEO.
Kim Joo-young, a human resources expert with experience as HR team leader at Yuhan Kimberly and HR director at Krafton, will be responsible for stabilizing ADOR's organization and overseeing internal restructuring.
While ADOR stated that "Min Hee-jin has stepped down as CEO," the reality is that she was dismissed. Alongside Min Hee-jin's removal, ADOR announced a separation of production and management within its internal organization, applying the same principles used with other labels. They also stated that Min Hee-jin would continue to produce for New Jeans.
However, Min Hee-jin's side has protested this decision, arguing that it was made without her consent. They claim that "the CEO was unilaterally dismissed without regard to Min Hee-jin's wishes," describing it as a serious breach of the shareholder agreement, which they assert is still valid. They also contend that the decision for Min Hee-jin to continue producing for New Jeans was not discussed.
In response to Min Hee-jin's objections, ADOR issued a rebuttal. They stated, "Today's board meeting was conducted legally in accordance with the procedures stipulated in the Commercial Act and the Articles of Incorporation, from the notification of agenda items to the voting process. The meeting was held on a date that former CEO Min Hee-jin had requested to be postponed. With former CEO Min attending via video conference, the board of directors held sufficient discussions and made the best choice for the future of ADOR and New Jeans."
Min Hee-jin and HYBE are now in conflict over suspicions of a management rights takeover, with both parties expected to engage in a serious legal battle in the upcoming main lawsuit.
Comments
JoJo
My understanding of it was that her CEO contract was for 5 years. Her board of directors membership contract was for 3 years. That board of directors membership contract ends November of 2024. The Board has voted to kick her off the board and not renew that contract. The genius part of this is that she has to be a member of the board of directors in order to be CEO. ADOR kicked her off the board and fired her from the CEO position, then HYBE filed to terminate the shareholder's agreement with the court, but they did that back at the end of June (?), I curious to know why she is only NOW trying to fight it.
Holi
I don't normally watch other pages but I took a squiz at Seoulites latest on someone's signpost and he makes a couple of interest notes about how they managed to get her out.
