Ador, one of the major labels of the largest entertainment agency in Korea, Hybe, plans to sue the NewJeans manager for breach of duty.
Recently, there has been controversy as it has been revealed that NewJeans attempted to negotiate advertising model contracts directly with global luxury brands, excluding their agency Ador. It has been confirmed that the manager played a mediating role in this.
Ador believes that the manager, despite being an employee (currently on standby), conveyed NewJeans' intention to enter into contracts directly with global brands without reporting it to the company, which constitutes a violation of duty. Although they noticed this in time and attempted to intervene, they have confirmed their intention to proceed with the lawsuit.
According to industry sources on the 23rd, the conflict between Hybe and former Ador CEO Min Hee-jin is escalating into a broader dispute involving Ador-NewJeans and the Ador-NewJeans manager.
Min Hee-jin, referred to as the 'mother of NewJeans,' has stepped down from both her position as Ador's CEO and her role as an inside director, following the management rights conflict with Hybe. Recently, NewJeans declared termination of their contract with Ador, aligning themselves with Min.
The contract period for NewJeans lasts until July 31, 2029. Ador has filed a lawsuit to confirm the validity of the exclusive contract.
Although the lawsuit is ongoing, NewJeans opened their own social media account called 'jeanzforfree' on the 14th, establishing a communication channel independently. Photo shoots featuring Min Hee-jin as director were posted on this channel. There have also been indications that they pursued an advertising model contract with global watch brand O without involving Ador.
◇Plan to transition to 'Min Hee-jin's agency' falls through, rumors of a family company establishment for NewJeans
NewJeans is in a situation where establishing a corporation to support various entertainment activities is necessary for their independent activities. This also explains why former CEO Min contacted the KOSDAQ-listed information and communication equipment company, Daborink, through family members of NewJeans.
According to industry reports and entertainment media, Lee, the uncle of NewJeans member Hyein, approached Daborink, asking them to 'invest 5 billion won in Min Hee-jin,' and it is said that he facilitated a meeting between chairman A, the substantive owner, and former CEO Min last September.
Daborink announced earlier this year that it would modify its business objectives to include entertainment-related aspects, and it had also declared the launch of Billboard Korea, aimed at promoting K-content in the global market. Reportedly, Chairman A intended to completely hand over the company to Min following their meeting, aiming to raise Daborink as 'Min Hee-jin's entertainment company.'
This was formalized through a correction notice regarding the resolution to convene a shareholders' meeting on October 2, announcing the appointment of Lee, Hyein's uncle, and Park, who is known to have contributed to NewJeans' activities in Japan, as inside directors.
In response, Min Hee-jin's side revealed that they heard rumors circulating in the investment community, such as 'we're going to receive an investment from someone' and 'we're going to sign a contract with someone,' but they stated that none of it is true and that they have not contacted or discussed with anyone.
◇Furious association: 'Tampering undermines the basis of exclusive contracts… considering exclusion from Circle Chart counts'
In the music industry, there are rampant rumors that NewJeans will establish a family business to operate independently. According to Articles 2, 6, and 14 of the Ministry of Culture's standard exclusive contract, an entertainer's activities must be conducted through their agency.
Given the need to dispute the effectiveness of the exclusive contract with Ador, the risk of lawsuits for penalties due to potential contract termination, and concerns about declining popularity, it is believed that finding investors will be difficult, making a family company a viable option.
The visa issues for Hanni, a member with dual nationality from Australia and Vietnam, are also a challenge. To engage in entertainment activities in Korea, foreign nationals must sign an exclusive contract with an agency registered under the cultural arts planning business and acquire an 'E-6 (entertainment) visa' with documents such as the identity guarantee of the agency's representative. Hanni is currently active using an E-6 visa obtained through Ador.
However, under the current exclusive contract, any individual entertainment activities by the members or activities through a third party would constitute a breach of contract. This includes external agencies as well as family companies established by the members or their parents.
The pop music industry is treating this matter as a 'tampering' issue, which undermines the value of exclusive contracts, and it is being taken very seriously. Tampering refers to when a singer under contract with a specific agency contacts another agency before the contract term ends.
The Korean Music Content Association issued an official statement, saying, 'We hope that former Ador CEO Min Hee-jin will clarify her position on the tampering allegations and factual circumstances,' adding, 'NewJeans must ensure adherence to their exclusive contract and engage in sincere dialogue with their agency; if no agreement is reached, they should humbly await the judgment of the judiciary.'
The association also stated that they would consider excluding the albums and sales figures of agencies and related artists involved in tampering allegations from the aggregated data on the nationally recognized music chart, Circle Chart. They are also reviewing whether to exclude these sales figures from music broadcast programs that use Circle Chart's data as well as major music award ceremonies in Korea.
The Korean Management Federation pointed out that 'the claim that an exclusive contract can be terminated only by declaration will have disastrous consequences for the entertainment industry, which has been investing in trainees since their debut.' The Korea Startup Forum also expressed concern, stating, 'Investment contracts are legally binding promises based on mutual trust,' and warned that 'if the interpretation and execution of contracts are unilaterally nullified, it will undermine the essence of investment decisions and create irreparable mistrust throughout the investment ecosystem.'
The Korean Entertainment Producers Association stated, 'NewJeans must withdraw their irresponsible assertions and return to normal activities.'