[Click eStock] "HYBE appoints new CEO of ADOR... Difficult to see as risk resolution"

Meritz Securities evaluated on the 28th that "although it is too early to see it as a risk resolution, it is positive in that the multi-label system was supplemented through the separation of production and management" in relation to the appointment of a new CEO at Adore, a label under HYBE.

The day before, Adore, a label under HYBE, held a board meeting and appointed Kim Ju-young, an inside director, as the new CEO. Former Adore CEO Min Hee-jun retained his position as an inside director and continued his producing duties. Through this, Adore's internal organization separated production and management. Adore explained that the multi-label operation principle, which has been applied to all other labels, was an exception only for Adore, where the CEO had overseen both production and management. They also stated that the notification of agenda and voting procedures were conducted legally according to the procedures stipulated by commercial law and the articles of incorporation. In response, former CEO Min Hee-jin claimed through the media that the unilateral dismissal resolution was made without her consent. Min Hee-jin's legal representative stated that they will respond after further discussions.

HYBE disclosed in its 2024 semi-annual report that as of the end of the current half-year, it has entered into a shareholders' agreement granting a put option on part of the 20% non-controlling interest related to its equity investment in Adore Co., Ltd., a subsidiary. After the reporting period, the shareholders' agreement was terminated with some shareholders, and a lawsuit confirming the termination of the shareholders' agreement has been filed and is pending.

On May 30, the court granted a provisional injunction prohibiting the exercise of voting rights filed by former CEO Min Hee-jin against HYBE. Subsequently, the two existing inside directors of Adore were replaced by three directors from HYBE.

Kim Min-young, a researcher at Meritz Securities, said, "It is necessary to confirm the court's decision, and since disputes may continue due to additional lawsuits, it is difficult to see it as a complete risk resolution," adding, "However, it is positive that Adore's internal organization also separated production and management to supplement the multi-label system." Researcher Kim analyzed, "The court's judgment on the lawsuit will be crucial in the future," and "If the shareholders' agreement is terminated, the market fatigue and risks related to the multi-label system, which have been highlighted since the beginning of the year, are expected to be resolved."

This content was produced with the assistance of AI translation services.