This article is part of our coverage of HYBE vs. ADOR CEO Min Hee Jin. You can read more and view the entire timeline here.
Dispatch has revealed the circumstances of how Min Hee Jin took control of NewJeans and the formation of ADOR.
In an exclusive report, Dispatch outlined exactly how Min Hee Jin was able to form ADOR as well as how NewJeans was formed. First, each of the members’ trainee periods was revealed by Dispatch for the first time. Minji joined Source Music in 2017 while Hanni joined Source Music in 2019 after participating in Big Hit and Source Music’s joint global audition. Haerin and Danielle both joined Source Music as trainees in 2020 and while Hyein‘s exact signing date was not shared by Dispatch, they did say Source Music first discovered her online before inviting her to an audition, which she passed and thus signed with Source Music.
All five of the NewJeans members trained under Source Music until the second half of 2021 and were actually selected by Source Music’s CEO So Sung Jin. While Min Hee Jin moved to HYBE in 2019 as the company’s Chief Branding Officer, her role was to take charge of the branding for HYBE’s affiliate companies. Big Hit also stated in their official announcement that Min Hee Jin would be taking charge of a new girl group and launch her own label to discover new talents and produce music.
Min Hee Jin was initially in charge of the new girl group that would debut under Source Music. But she wanted to be in charge of her own agency, leading to the birth of ADOR. With this, Min Hee Jin took trainees from Source Music into her own agency. Five of those trainees included the current members of NewJeans (Minji, Hanni, Haerin, Danielle, Hyein). But instead, the training expenses for these five trainees for the time they were at Source were sent to the agency.
Dispatch admits that Min Hee Jin brought NewJeans to fame, and she deserves a lot of credit for recreating the 2000s sound in a modern way alongside producer 250. But the person behind NewJeans was actually So Sung Jin, who took in the trainees who made up NewJeans.
Due to NewJeans’ success, she was rightfully rewarded though. HYBE’s directors allowed her to purchase ADOR stock at low prices in the first quarter of 2023, instead of making her purchase stock options. As a result, Min Hee Jin was able to secure 573,160 shares in ADOR, which was good for an 18% stake in the company and the second-largest shareholder. Allowing Min Hee Jin to purchase old stock instead of stock options meant she was also able to circumvent a 45% tax on the shares she acquired.
However, when Min Hee Jin received her stocks, ADOR was in the red. ADOR’s 2022 financial report showed that they had ₩18.6 billion KRW (about $13.6 million USD) in revenue with ₩4.00 billion KRW (about $2.92 million USD) in operating losses. So Min Hee Jin received her stocks from a company that was already losing money and also did not have to pay any taxes on it. In addition, stock options for a company will vanish should the holder leave the company. However, regular stocks can be freely bought and sold at any time.
Dispatch also stated Min Hee Jin also has put options on HYBE valued at around ₩100 billion KRW (about $72.9 million USD). A put option is an option contract that allows the buyer the right to sell a stock at a specific price prior to the expiration date of the contract. Traders buy put options when they expect the value of a stock to decrease, which means Min Hee Jin expects HYBE’s stock price to decrease.
Let’s pretend HYBE’s stock is valued at $100. A put option contract is for 100 shares of the stock and costs a price per share, we’ll say $5. If Min Hee Jin buys a put option on HYBE, she will pay $500 (100 shares times $5 for the put option contract). The value of HYBE’s stock then drops to $50. Min Hee Jin can then exercise her right to sell HYBE’s stock for $100, even though the current price is $50, and profit $4500. ($100 minus $50 equals $50 profit per share. $50 times 100 shares equals $5000. $5000 minus the original put option price of $500 equals $4500 profit.
Min Hee Jin stated that she left HYBE because she had a similar investment offer from a different company so she didn’t need to stay at HYBE. But in the end, she benefited from HYBE’s system, plucking all of the trainees she wanted from HYBE’s trainee pool. Dispatch summarized it as follows — If NewJeans succeeded, Min Hee Jin would be credited. If NewJeans failed, the debts would be covered by HYBE, not ADOR. Thus, NewJeans’ fame cannot be singlehandedly credited to Min Hee Jin.
