Hive, Min Hee-jin and Other ADORE Executives Invoke Audit Rights
80% vs 20% Stake... Board Control 'Min Hee-jin's Rebellion'
"'Non-Interference' Is Top Priority" Past Interview Revisited
Hive, the nation's top music agency, is drawing attention as it clashes with Min Hee-jin, CEO of its subsidiary Adore, which produced the group NewJeans, raising interest in the background of the conflict.
Since its establishment, Hive has emphasized a 'multi-label system,' making conflicts between the headquarters and its subsidiary labels an unprecedented event. There is also growing concern about the impact this may have on NewJeans, who are about to make a comeback.
On the morning of the 22nd, Hive launched a sudden audit targeting CEO Min Hee-jin and another executive, Mr. A. Hive's audit team reportedly visited Adore's management to recover digital assets and secure face-to-face statements. Hive suspects that CEO Min attempted to seize management control.
Within the industry, there are reactions expressing difficulty in understanding CEO Min's attempt to 'break away from Hive.' Currently, Hive holds 80% of Adore's shares, CEO Min owns 18%, and the remaining 2% is held by Adore's management. It is practically impossible to control management with an 18% stake. CEO Min secured her 18% stake last year by exercising a call option, becoming the second-largest shareholder. Hive sold the remaining 2% to Adore's management. Hive suspects that CEO Min and Mr. A discussed leaking confidential contracts to attract investors and inducing the sale of Adore shares held by Hive. In the music industry, this has been interpreted as a deep emotional rift between the two sides.
Additionally, there is speculation in the industry that CEO Min and Adore's management may have attempted a third-party paid-in capital increase. As a non-listed company, Adore can proceed with a third-party paid-in capital increase with only a board resolution. Through a large-scale capital increase, Hive's shareholding could be diluted, and management rights could be delegated from a friendly financial investor (FI). An investment banking industry insider analyzed, "If a large-scale capital increase is attempted, not only Hive's stake but also CEO Min's stake will be diluted. However, if the FI is a friendly shareholder to CEO Min, management rights can be exercised through side agreements." Earlier, in September 2023, Adore's board was entirely filled with the 'Min Hee-jin faction.'
Some attribute CEO Min's push for independence to NewJeans' explosive growth. NewJeans is scheduled to hold a second fan meeting at Tokyo Dome in Japan, with a capacity of 55,000, in June this year. This signifies that NewJeans' fandom has grown to a mega scale. Their world tour next year is also expected to attract around one million attendees.
CEO Min Hee-jin joined SM Entertainment through an open recruitment in 2002 and worked there until 2018, overseeing concepts and branding for famous idol groups such as Girls' Generation, SHINee, and EXO, earning a reputation as a star producer with unique color and expression in the music industry. She later moved to Hive, leading the branding and design of the Yongsan new headquarters space.
She established Adore as a label under Hive and debuted the girl group NewJeans in 2022, releasing consecutive hit songs such as "Hype Boy," "Attention," "Ditto," and "OMG," winning various music awards and achieving No. 1 on the US Billboard main album chart, the "Billboard 200." CEO Min led the debut process of NewJeans and was called the "mother of NewJeans."
While active in the music industry, CEO Min's perfectionist attitude toward results and straightforward speech style have often been topics of discussion. Notably, in an interview with Cine21 in January last year, she said, "People easily shout 'Hive capital,' but personally, I don't agree with that expression," which sparked much interpretation.
There have been rumors of discord with Hive, as it seemed she attributed the driving force behind the "NewJeans success story" not to the capabilities of the "No. 1 agency Hive" but to Adore or herself. She also said, "At that time, I had various options, and regardless of the investor, 'creative independence' and 'non-interference' clauses would have been my top priorities, so there was no particular reason it had to be Hive."
Regarding this, CEO Min rebutted that the fundamental issue is the "Ailet's NewJeans copy incident." Adore stated in an official position the day before, "They are trying to dismiss me because I raised the issue of Ailet copying NewJeans." CEO Min strongly denied Hive's claim that the cause of the audit was an "attempt to seize management rights," calling it "absurd."
Given CEO Min's usual style, it seems unlikely she will accept Hive's demand for resignation. Meanwhile, Hive is reportedly planning to analyze the secured digital assets and, if necessary, take legal action based on the findings.
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