"Where Is a 100 Billion Won Slave Contract?"... HYBE 'Flared Up'

Min Hee-jin's Side: "Trying to Bind Me for Life with a Shareholders' Agreement... Slave Contract"
HYBE: "Even Doing Nothing Earns 100 Billion Won... Ordinary People Can't Imagine"

Min Hee-jin, CEO of ADOR, is making a statement on the 25th at the Korea Conference Center in Seocho-gu, Seoul, regarding the conflict with the parent company HYBE. Earlier, HYBE announced the results of an interim audit on ADOR's management, including CEO Min Hee-jin, and stated that they would file charges against them for breach of duty and other allegations. Photo by Kang Jin-hyung aymsdream@

Min Hee-jin, CEO of ADOR, claimed that the shareholder agreement (SHA) signed with HYBE was a 'slave contract' that binds her, prompting HYBE to fully refute the claim by saying, "Where is a 100 billion won slave contract?"

On the 26th, a media outlet reported that HYBE and CEO Min signed the ADOR shareholder agreement (SHA) around March last year, setting multiple clauses such as 'non-compete clause' and 'stock holding period.' The non-compete clause is a provision requested by the buyer to prevent unfair competition situations by prohibiting shareholders from starting a business in the same industry after selling their shares.

Of the 18% stake held by CEO Min, only 13% is subject to a put option, while 5% is not set with a put option. In particular, this 5% cannot be disposed of without HYBE's consent, meaning HYBE can indefinitely block competition by holding this as leverage if it wishes.

CEO Min also expressed at a press conference the day before, "I asked HYBE management, including CEO Park Ji-won, to review the shareholder agreement, and they replied 'there is no problem' and 'just trust me,' but it was a contract meant to bind me for life."

In response to these claims, HYBE stated, "CEO Min herself said, 'I earn 100 billion won even by doing nothing,' and the conditions that allow cashing out and starting a business by the year after next cannot be called a slave contract. It is an unprecedentedly generous compensation condition that ordinary people cannot even imagine."

The origin of the conflict over the shareholder agreement dates back to when CEO Min first secured a 15% stake. Right after ADOR was established in 2021, HYBE decided to grant shares to CEO Min through stock options. Under the Commercial Act, a corporation can only grant stock options up to 10% of the total issued shares. Also, stock options come with tax issues.

Therefore, HYBE chose call options (the right to buy at a predetermined price) instead of stock options to grant CEO Min 15% shares (13% to CEO Min and 2% to ADOR management) at a discounted price of about 1.1 billion won. At that time, put options were also granted. Later, CEO Min was granted an additional 5% stake by HYBE, but no put options were set for this portion. This was considered compensation for past performance, and until then, both sides reportedly did not feel the need for put options.

HYBE said, "Regarding the sale-related clauses in the contract that CEO Min claims are slave contract terms, there was a difference in interpretation about the priority of two clauses, and we already sent a response in December last year stating that 'if the interpretation is ambiguous, we will resolve the ambiguous clauses and modify them so that there is no problem.'" In other words, HYBE was willing to amend the contract to make it easier for CEO Min to dispose of all her shares.

HYBE also said, "It is not true that she was bound forever," adding, "CEO Min can sell her shares starting this November, and if she sells her shares, the non-compete clause will not apply after her employment contract with us expires in November 2026."

HYBE further stated, "Although CEO Min said she was not interested in money, the core issue that triggered the discussion was the scale of compensation." According to industry sources, HYBE intended to set the exercise price of the put option based on 13 times the average operating profit of the current and previous year if CEO Min exercised the put option. In this case, the value of CEO Min's shares would be about 100 billion won. However, CEO Min reportedly demanded to raise the multiple to 30 times.