Hanni, a member of NewJeans, said in a surprising YouTube live broadcast on the evening of the 11th that a HYBE manager told members of a group to ignore her. NewJeans parents, concerned about the alleged bullying in the company, informed HYBE and asked for a consultation for a peaceful solution. However, the two parties failed to resolve the conflict. HYBE said that after checking the 7-8 minute CCTV footage of the situation at that time, Hanni and the ILLIT members said goodbye to each other and that the manager did not make the relevant remark.
NewJeans members took action three months later when CEO Min Hee-jin was removed from ADOR’s leadership position. Previously, their parents said that President Bang Si-hyuk did not greet the members when they greeted them multiple times. HYBE responded at the time, “President Bang may have facial recognition disorder.”
Finally, NewJeans members demanded that Min return to his position as CEO within two weeks. Since a specific deadline was set, doubts were raised as to whether HYBE would consider legal action. The music industry sees a strong possibility that NewJeans will file a lawsuit to terminate its exclusive contract. Contract termination lawsuits have usually been filed by sending requests to the artist’s agency and filing an injunction to suspend the validity of the exclusive contract if it is not corrected within a certain period of time.
A KPOP official shared, “As the members of NewJeans went through the ‘personnel controversy’ and their distrust of HYBE increased, they ended up in the same position as former CEO Min. Through this livestream, they seem to have crossed a line and cannot return to HYBE, revealing their intention to be in the same boat as former CEO Min.”
It is highly likely that the group’s request to “return former CEO Min” will not be accepted. HYBE has currently filed a complaint against former CEO Min for breach of trust allegations. Analysts say that since the conflict has reached its peak, it is unlikely that they will be in harmony.
If the lawsuit does get serious, the key issue will likely be their fine. The Fair Trade Commission’s standardized contract imposes a fine by multiplying the average monthly sales of the previous two years by the number of months remaining in the contract based on the termination period. As a result, NewJeans’s fine is estimated at around 300 billion won. It is unlikely that the group will choose to pay a fine and walk free.
An official predicted that “NewJeans will build a justification to leave the company without penalty, and HYBE will focus on gathering evidence that former CEO Min raised the “temperament suspicion,” which was the beginning of the conflict. HYBE said that former CEO Min planned to recruit outside investors to take ADOR independent and take out NewJeans.
HYBE stock price fell about 6% on the day due to the fallout from NewJeans’ livestream and closed trading at 169,000 won, down 2.82% from the same day.
Source: Market Insight
