Following revelations about CEO Min Hee-jin's undisclosed stake in the label ADOR,  home to the girl group behind hits like 'Super Shy' NewJeans, Korean entertainment giant HYBE has announced the launch of an audit.

According to a Billboard report, Min Hee-jin, a veteran creative in the K-pop industry, controlled an 18% stake in ADOR, as discovered by Korea's Financial Supervisory Service. 

This development prompted HYBE to take action, citing its right to audit Min and top executives at its subsidiary label, ADOR. HYBE has also requested that Min Hee-Jin step down from her position.

HYBE has reduced its stake in Ador from 100% to 80% by the end of 2023, with the remaining 2% held by other executives. According to Ador's financial statement, Min exercised her call option to buy an 18 percent stake in HYBE for around 1.1 billion won ($8 million) last year.

NewJeans Label ADOR Versus HYBE: Korean Entertainment Industry Drama

The audit coincides with allegations made by ADOR and Min Hee-jin themselves. ADOR accuses HYBE of copying NewJeans with its newest act, the girl group ILLIT, and claims that both BELIFT LAB and HYBE are involved in the alleged infringement. 

This accusation has sparked a dispute between the two parties, with Min Hee-jin denying that ADOR and NewJeans seek independence.

According to the Korean news outlet Chosun, HYBE's audit team discovered evidence that Min Hee-jin was planning to seek independence for ADOR. This strategy included pressuring HYBE to sell its majority stake or form a new company with NewJeans.

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What Does This Mean for NewJeans?

Despite the ongoing audit and controversy, analysts speaking to Allkpop reassured investors that NewJeans' upcoming releases are expected to proceed as planned, with minimal disruption anticipated. 

They also suggested that even if NewJeans were to part ways with HYBE, the impact on the company's overall performance would be minor.

In response to the audit issue, securities analysts predicted increased stock volatility for HYBE in the short term. However, they also noted that this volatility could present a potential buying opportunity for investors .

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