Court Grants Injunction Prohibiting HYBE from Exercising Voting Rights on 'Min Heejin Dismissal'... 20 Billion KRW Compensation Required if Violated

[Image source=Yonhap News]

Min Hee-jin, CEO of ADORE, won a provisional injunction at the court to prohibit the resolution of her dismissal at the extraordinary general meeting of shareholders against HYBE.

The Civil Division 50 of the Seoul Central District Court (Presiding Judge Kim Sang-hoon) on the 30th granted Min’s injunction request to prohibit the exercise of voting rights against HYBE Co., Ltd. To psychologically enforce HYBE’s obligation to refrain from exercising voting rights according to the court’s decision that day, the court set the compensation for breach of duty at 20 billion KRW, considering the damages Min would suffer if dismissed and other related circumstances.

The court judged that, based on the interpretation of the shareholders’ agreement between the parties, HYBE has a contractual obligation not to exercise voting rights at the shareholders’ meeting to dismiss Min unless there is a cause for dismissal or resignation on Min’s part.

Furthermore, the court explained the reason for granting the injunction, stating, “Whether there is a cause for dismissal or resignation for Min needs to be determined through thorough evidence investigation and careful examination in the main trial, and based on the claims and materials submitted so far, the dismissal or resignation reasons asserted by HYBE have not been sufficiently proven.”

The court added, “Considering that the holding of this extraordinary shareholders’ meeting is imminent, making it difficult for Min to seek relief through the main lawsuit, and that the damage Min would suffer by losing the opportunity to perform her duties as a director of ADORE during the remaining period is a type of damage difficult to recover through monetary compensation afterward, it is also established that there is a need to prohibit HYBE’s exercise of voting rights by provisional injunction before the main judgment.”

However, the court stated, “It is clear that Min sought ways to independently control ADORE by taking NewJeans out of HYBE’s control range or pressuring HYBE to sell its shares in ADORE, thereby weakening HYBE’s control over ADORE.”

But the court pointed out, “Nevertheless, it is difficult to see that Min went beyond the stage of seeking such methods to concrete execution acts, and although such acts by Min may be considered a betrayal against HYBE, it is hard to say they constitute a breach of fiduciary duty against ADORE.”

Min is the CEO of ADORE Co., Ltd. and holds 17.8% of its shares. HYBE is the largest shareholder, holding 80% of ADORE’s shares. ADORE was scheduled to hold an extraordinary general meeting of shareholders on this day with the agenda including the dismissal of Min from her position as an inside director of ADORE.