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NEW DEVELOPMENT: HYBE might buy back the shares 70% less market price

Added 2024-05-01 18:12:10 +0000 UTC

The ongoing legal dispute between Hybe and Ador is intensifying. Recently, a new issue has arisen regarding a potential breach in the shareholder agreement between Hybe and Min Heejin, Ador's CEO. If Hybe proves in court that Min Heejin violated the agreement, she could face severe financial consequences, with potential earnings dropping from 100 billion to just 3 billion.

The contract between Hybe and Min Heejin includes a "call option." This clause allows Hybe to buy back its shares from her at a reduced rate if she breaches the agreement. Specifically, they can purchase the shares at the lower of either their face value or 70% of their market value. Each share's face value is 5 million, and Min Heejin owns 563,160 shares, which totals approximately 2.865 billion at face value.

It's also noted that Min Heejin borrowed about 2 billion from Chairman Bang to acquire these shares. Once she repays this loan, she would be left with almost nothing. The exact details of what would constitute a breach are unclear, but typically issues like betrayal of trust or leaking confidential information are considered serious.

The situation is likely to be fiercely debated in court. Hybe has stated it will not reduce this legal dispute to mere accusations of compensation disputes or retaliation. They allege that Min Heejin planned an illegal takeover of Ador, claiming her whistleblowing was part of this scheme. Hybe urges her to cooperate with the upcoming criminal investigation and to stop manipulating public opinion by using artists like NewJeans, arguing it breaches her ethical responsibilities as a producer.

On the other side, Ador acknowledges the risks due to the call option and is prepared to fight, citing the potential total loss of their investment. During a press conference on April 25, Min Heejin accused Hybe of betrayal. Given that Hybe controls 80% of Ador, any vote to remove Min Heejin is likely to pass easily.

source https://n.news.naver.com/article/001/0014663543?sid=103