The CEO of K-pop powerhouse HYBE, Lee Jae-sang, says that the company now plans to “focus all its power” on “normalising” its Ador label, while supporting Ador-signed NewJeans.
That comment was made in an email to staff commenting on the news that a court in Seoul has dismissed a legal claim by Ador founder Min Hee-jin as part of her ongoing bid to be reinstated as CEO of the label.
It also followed an earlier public statement from Lee responding to a controversy that has erupted over an internal HYBE document that was discussed in South Korea’s National Assembly on 24 Oct, and which included disparaging statements about K-pop artists signed to rival agencies. With the very public dispute with Min still grabbing headlines, that new controversy has further damaged HYBE’s reputation.
The internal document was a ‘music industry report’ designed to update senior HYBE execs on recent industry trends, including updates on artists working with rival K-pop agencies. It came to public attention during a session of the Culture, Sports & Tourism Committee in South Korea’s National Assembly last week. Then 20 pages of it leaked online.
According to Soompi, the report included comments about K-pop artists signed to agencies like SM Entertainment, JYP Entertainment and YG Entertainment, “maliciously commenting on their looks and skills, sharing unverified rumours, discussing plans to carry out viral marketing tactics against them, and more”.
The report has resulted in a strong backlash from fans of those artists who were mentioned in it, prompting Lee to issue a full public apology in a statement posted to HYBE’s website. He wrote, “I deeply apologise to the artists, industry stakeholders and fans”.
The document, he added, was “part of a process to retrospectively gather various reactions and public opinions on industry trends and issues”, and was only ever intended to be seen by a small number of HYBE employees, to help them “understand market and fan sentiments”.
But the content of the document, he admitted, “was highly inappropriate”. It contained “provocative and explicit expressions directed at K-pop artists, included personal opinions and evaluations of the author”.
“I acknowledge all the mistakes and take full responsibility”, he added. “I am particularly sorry and distressed about the unfounded suspicions of reverse viral marketing that are not true at all, causing misunderstandings and harm to innocent artists and individuals”.
Lee then revealed that the company had reached out to the agencies whose artists were mentioned in the report to “offer our apologies directly”. No more documents of that kind will be created, he then stated, adding, “I promise to establish guidelines and strengthen internal controls to prevent such issues from occurring again”.
HYBE has been dealing with lots of negative press of late. There was the news earlier this month that the company will have to repay millions in debt after spooked investors in the company’s bonds opted to redeem their investments, a development that prompted a new bond issue in order to raise the necessary funds.
And this is all taking place alongside the ongoing - and very public - dispute with Min, who was removed as CEO of Ador - the label she co-founded - back in August. At the time HYBE said Min would continue in her production and creative roles with NewJeans, but would no longer run the company.
However, Min insisted she had not agreed to those changes, and she has been fighting a legal and PR battle with HYBE ever since in a bid to get the CEO job back. That included going to court seeking an injunction forcing HYBE to reinstate her.
After the court dismissed that claim yesterday, HYBE said “we appreciate the court’s wise decision”. However, a spokesperson for Min said the ruling doesn’t mean the court accepted HYBE’s legal arguments and that a breach of contract dispute remains, suggesting both the legal and PR battle will continue.
Nevertheless, according to Korea JoongAng Daily, Lee sent an email to his employees seemingly aiming to convince them that the company’s very public dispute with Min - and by association with NewJeans and their fans - might now be in its final phase.
“The prolonged state of disorder has reached a turning point”, he wrote, adding, “the direction for resolving various issues is becoming clearer - I hope for meaningful progress soon in the renegotiation of Min’s contract as producer for NewJeans”.
Possibly aware his email would leak and that NewJeans’ fans would therefore be reading his words, he was also keen to stress that HYBE “remains steadfast in its commitment to fully mobilise resources to support NewJeans in becoming even more prominent on the world stage”.
Min has previously said that, to fully realise her vision for NewJeans and Ador, it’s not enough to be producer of the group and a director of the label, she also needs to be CEO. Despite Lee’s optimism that a “turning point” has been reached, it’s not clear that Min has, as yet, changed her position on that.
Given the backlash to HYBE’s internal report this week, Min may well feel public opinion is even more on her side in this dispute, even if she has had a knockback on the legal front.