On October 21, a topic titled “HYBE IM 4 Billion Domestic Transaction with Ador Amid Dispute (NewJeans Transaction Issue)” was posted on Korean forum theqoo.
The topic cited a news article, which mentioned a suspected internal money transaction from ADOR to HYBE IM, the conglomerate’s gaming subsidiary.
In particular, the article began by stating that, according to industry sources, at the end of September it was reported that internal transactions amounting to KRW 4.2 billion (about 3 million of dollars).
Among them, HYBE IM earned KRW 4.1 billion (about $2.9 million) in revenue from ADOR, while ADOR only recognized KRW 90 million (about $65,000) from HYBE IM.
The only explanation either company provided for the transaction was over game royalties. However, there are suspicions that HYBE may inflate new business revenues by leveraging ADOR, which has seen a boost in sales thanks to NewJeans.
In typical cases where an artist under the HYBE label appears in a game, the label should recognize revenue from royalties or royalties. However, in this case, the roles are reversed, with ADOR essentially paying HYBE IM for its gaming services.
Last August, HYBE IM updated its “Rhythm Hive” game to include NewJeans. Since NewJeans is operated by Ador and HYBE IM used its intellectual property (IP), ADOR should have been the one to recognize the revenue.
An industry insider pointed out: “HYBE is already seeking to obtain tens of billions of won in quarterly revenue from Ador, and HYBE IM, which has not yet stabilized, is recognizing the revenue under unclear circumstances. If this structure were to continue, it could reduce the compensation amounts to which artists are entitled, leading to further problems.”
In response to this, a HYBE representative said: “It is difficult to confirm specific details regarding insider transaction information.”
As a result, many netizens suspect that HYBE stole money from the NewJeans company to inflate its gaming subsidiary.
Below are some comments from netizens:
- Wow…that’s why they were trying to kick Min Hee-jin out. Spend the money as they wanted.
- They needed a leader who would do what he was told without making a sound, but Min Hee-jin didn’t do what she was told and was like a thorn in the eye, so she was kicked out.
- It seems they only took care of the record label representatives and took all the profits from the artists.
- It’s so damn shady
- I think ADOR has held up well in a company that has functioned this way.
Source: theqoo
