May 29, 2024

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The shares of K-pop titan HYBE face another setback as the dispute with the NewJeans label prolongs

A South Korean music executive, credited with creating the popular K-pop group NewJeans, refuted allegations of attempting to separate her label from HYBE, the home of global sensation BTS. This denial caused a decline in HYBE’s shares on Friday.

The internal dispute within HYBE, South Korea’s largest music company, has led to a more than 12% decrease in its share price since becoming public. This dispute has also dampened expectations for the success of new releases by NewJeans and the return of some BTS members from mandatory military service. On Friday morning, HYBE shares fell over 5%, while the benchmark KOSPI index rose over 1% in early trading.

During a live-streamed event watched by millions of K-pop fans on Thursday, Min Hee-jin, CEO of the ADOR label majority owned by HYBE (352820.KS), denied claims of plotting to break away from the company. This contradicted HYBE’s assertions that she was leading efforts to become independent. Following this, HYBE initiated an internal investigation earlier in the week and accused Min of breach of trust. CEO Park Ji-won of HYBE apologized for causing concern among fans, artists, and staff due to the process of upgrading the multi-label system.

Min and other top executives hold a 20% stake in ADOR, while HYBE owns 80%.

This dispute is the latest issue to affect South Korea’s lucrative K-pop industry. Last year, the takeover of SM Entertainment by South Korean social media giant Kakao sparked an internal management battle. Additionally, the girl group Fifty Fifty, known for the TikTok hit “Cupid,” saw their career decline following a legal dispute with their agency, Attrakt, in 2023.