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HYBE appealed to the Financial Supervisory Service (FSS) on May 15, 2024, claiming that CEO Min Hee-jin and other ADOR executives had purchased and sold stocks on May 14 by using confidential information. A securities analyst was also charged with participating in these activities in the complaint.
On May 16, Maeil Business reported that Min Hee-jin issued a statement strongly denying allegations of conspiring with a financial advisor for the crash of HYBE's stock market value.
According to industry sources, ADOR's parent firm HYBE found out through an internal investigation that the analyst had arranged a meeting between ADOR officials and a foreign investor who was visiting South Korea on April 17, 2024.
The investor stated at this meeting that if ADOR was valued at 1.4 trillion won, he would be willing to invest immediately.
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Min Hee-jin accused of engaging in illegal insider trading to drop HYBE's market value
The suspicion stems from a weeks-long conflict between HYBE and ADOR, wherein HYBE claimed that CEO Min Hee-jin of ADOR surreptitiously tried to acquire a majority share in the company after it prospered as an affiliate under HYBE's multi-label structure.
Considering one of the executives is Min Hee-jin's confidante and Vice President of her label, HYBE stated that it would also want to request a further investigation into both individuals. It is important to note that on April 26, 2024, HYBE had reported a loss of $629 million of share price due to the feud.
However, additional information regarding the Vice President wasn't disclosed for safety purposes. Through conversations with CEO Min Hee-jin, the parent corporation believed the analyst had access to private information.
An investment report was put together by the analyst, who works for a financial business and specializes in HYBE and other entertainment firms.
South Korean media outlet The Chosun Daily reported on May 16 that HYBE wrote in its petition to FSS about the ADOR CEO's attempt of "circulating false claims" against its artists (namely BTS and ILLIT). Previously, in April 2024, Min Hee-jin accused HYBE Corporation founder and chairman Bang Si-hyuk of "stealing" her idea and creating BTS.
Later, she accused BELIFT LAB of plagiarising NewJeans' concept and choreographies to debut its rookie girl group ILLIT.
"They attempted to undermine HYBE’s stock price by circulating false claims that an artist under HYBE’s label plagiarized another artist, causing investor losses through market manipulation." (as reported by The Chosun Daily and translation acquired from Google Translate)
Hybe's market value has been substantially reduced by hundreds of millions of dollars as a result of the public and antagonistic conflict, which has included accusations of plagiarism, chart manipulation, and shamanism.
Furthermore, it has tarnished HYBE's connection with up-and-coming talent, NewJeans, while its biggest act, BTS, is on hiatus due to military enlistment.
According to HYBE's petition filed with the FSS, a week before HYBE initiated a comprehensive audit into ADOR about its CEO's alleged effort at management takeover, the Vice President planned the disposal of 950 HYBE shares.
The sale occurred a day before Min Hee-jin accused HYBE of mistreatment and discrimination in a press conference on April 26, 2024.
HYBE claimed that the executives disposed of their shares after learning about the audit beforehand to prevent a personal financial loss due to the well-publicized dispute between the two companies.
The average price of the 950 shares was 214,605 won, and their aggregate worth was 20 billion won (over $14.8 million) before they were traded in.
Amidst escalating disputes around Min Hee-jin's purported takeover ambitions of ADOR and allegedly turning it into a shell company, HYBE's stock price plummeted to 190,000 won since the share disposal. The Korea Times reported that HYBE asserted the share disposal as "illegal insider trading."
"Their sales of stocks should be considered illegal insider trading, especially considering the vice president is also classified as a HYBE executive in a broad sense."
HYBE owns 80% of ADOR's shares while Min Hee-jin owns about 18% and the rest is being acquired by various investors and stockholders. Meanwhile, the parent corporation is reported to have found replacements for the ADOR CEO and its management team and asked Min Hee-jin to step down as Chief Executive Officer.
BTS, who are all enlisted in the South Korean military due to compulsory conscription, would get back together in late 2025 after their discharge. However, BTS members have digitally released solo singles and albums in 2024 with its leader's second solo album Right Place, Wrong Person, scheduled for May 24, 2024 release.
Meanwhile, NewJeans garnered recognition with their songs such as Hype Boy, Ditto, OMG, and more have performed at Lollapalooza, charted at the top of the Billboard 200, and were in Coca-Cola and Apple ads in 2023.
