Speculation arising from internal transactions is increasing.
This article is part of our coverage of HYBE against ADOR CEO Min Hee Jin. You can read more and view the entire timeline here.
MOVES is once again at the center of a controversy involving its subsidiary label I LOVE IT after some recent media reports speculated that the conglomerate might be “stealing” from ADOR to inflate sales of IT MOVES THEMa gaming branch.
This report attracted the attention of Korean netizens through a viral Theqoo post, which cited an article mentioning suspicious insider transactions from ADOR to HYBE IM. According to the article, on October 17, the two subsidiaries of HYBE announced an internal transaction of KRW 4.20 billion (about $3.05 million) between them in the third quarter of 2024. While HYBE IM received 4 .10 billion KRW (approximately $2.98 million) ) from ADOR in terms of revenue, ADOR received only ₩90.0 million KRW (approximately $65,300 USD) from HYBE IM for the same.
To put the numbers in perspective, the money HYBE IM received equates to 3.7% of ADOR’s sales last year and 13.3% of HYBE IM’s. The explanation behind such a massive transaction, however, was brief. Both companies stated that these were gaming royalties, but there appears to be suspicion in the industry that HYBE is trying to inflate HYBE IM’s revenue by using ADOR, much of whose earnings are due to the success of New Jeans.
The reason for these suspicions is the apparent role reversal in this transaction. Typically, if a HYBE artist appears in a game, his label would receive a fee from the game company for the use of his intellectual property through royalties and copyrights. But in this case it appears that ADOR is paying HYBE IM for its gaming services.
Last August, HYBE IM updated its Rhythm Hive game to include NewJeans. Ideally, ADOR should have been paid by HYBE IM for the intellectual property of its artists. Interestingly, HYBE IM has reportedly not yet reached break-even point and even posted an operating loss of ₩19.7 billion KRW (approximately $14.3 million USD) last year.
A market insider reported the lack of transparency in such internal transactions, stressing that if such a system continues, “problems could accumulate, such as a decrease in the amount of compensation artists should receive.” When a media outlet contacted a HYBE official for his response, he said it was “difficult to confirm specific details regarding internal transaction information.”
This report has led many netizens to believe that HYBE is “stealing” from ADOR to inflate the profitability of its gaming subsidiary on paper.
- “At this point who is betraying trust?”
- “Who??? They are criminals.”
- “Oh. That’s why they tried to kick Min Hee Jin out. To use the money however they wanted. Crazy.”
- “There’s no way they’re just going to take money away from ADOR.”
- “If that were the case, then they could have stuck with one company. What’s the point of having labels?”
HYBE vs. Min Hee Jin, CEO of ADOR
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