This time, the issue involves a stylist at Ador, who reportedly received payments directly from advertisers without HYBE's involvement. Ador argues that this practice is customary, while HYBE counters it as illegal.
HYBE began an audit of Ador’s styling team leader, Mr. A, around 7 PM on the 9th, which concluded after midnight. Ador issued a press release the following morning, stating, "An unfortunate incident occurred last night," and accused HYBE of conducting an illegal and distressing audit.
Ador asserts that the audit was irrational and coercive. They claim that the contractual relationship between Ador, Mr. A, and the practices were typical industry customs, not embezzlement. Instead of receiving incentives from Ador, Mr. A took payments intended for freelancers from advertisers. Ador emphasized that no financial harm was done to the company.
HYBE meticulously responded, first denying the audit was coercive, asserting all procedures were lawful, and Mr. A had consented. They highlighted that Mr. A admitted to receiving significant sums directly from advertisers, emphasizing that such practices are not customary and are clear violations of legal standards.
HYBE also suggested that CEO Min Hee-jin was aware of and had directed these receipts. As evidence, they revealed conversations between Min and associates.
Did HYBE'saudit of ADOR's Style Directing Team Leader A start after work hours?
ADOR
HYBE's auditteam began their investigation of ADOR's Style Directing Team Leader at around7 PM on May 9th, after work hours had ended. The audit lasted for over 5 hours,continuing past midnight into May 10th.
HYBE
Mr. A arrivedat work at 6 PM. He received a call from the audit team during his commute andagreed to cooperate starting from 7 PM.
Did they followMr. A to his home and demand excessive materials?
ADOR
Mr. A wasworking at the company. However, HYBE's audit team followed him to his home anddemanded not only his laptop but also his personal mobile phone, which isn'teven company property. Moreover, they abused their authority by making seriousthreats like "you'll have to go to the police station if you don'tcooperate," putting psychological pressure on our staff throughunreasonable actions. Despite explaining that he had a schedule from earlymorning, their coercive auditing tactics clearly interfered with his work.
HYBE
During theaudit, Mr. A admitted to receiving hundreds of millions of won worth of goodsfrom subcontractors over several years, with the approval of CEO Min Hee-jin.He then expressed his intention to submit his personal laptop, which he hadleft at home, to the company. Accordingly, with his consent, only female stafffrom our company accompanied him to his residence to retrieve the laptop.
Mr. A himself agreed to the useof his personal information. Additionally, CEO Min Hee-jin and some ADOR staffmembers never used the company's official business messenger and conducted allconversations solely through KakaoTalk. We requested mobile phone data to besubmitted, but Mr. A did not comply. The audit team did not make any furtherrequests for submission.
How haveNewJeans' advertising shoot hair, makeup, and styling been handled so far?
ADOR
In theadvertising industry, it's common to utilize outsourced personnel (hair,makeup, styling) during shoots. Typically, freelancers are hired, and separatecontracts are signed between the advertiser and the freelancers.
At ADOR, instead of outsourcing,our internal staff members have been performing these duties. The internalstaff receives styling costs from the advertiser, and ADOR considers thesecosts when calculating incentives.
However, when determining the2023 performance bonus, we discovered that there were more NewJeansadvertisements than initially anticipated. As a result, we internally decidedthat it would be difficult for internal staff to handle all advertising stylingwork and agreed to outsource styling for advertising shoots.
The issue isthat Mr. A directly received the money. Is this an industry practice?
ADOR
The contractualrelationship (between ADOR and Mr. A) is a common practice in the industry.This information was already shared with HYBE's HR and ER departments back inFebruary. Instead of receiving incentives from ADOR, Mr. A received the amountthat the advertiser would pay to freelancers. There was no financial harm doneto ADOR. Embezzlement cannot be established.
HYBE
There is nopractice of a company's full-time employee directly receiving hundreds ofmillions of won in profits from advertisers. The amount that should have beenrecognized as company revenue was privately handed over, and the CEO was awareof this and condoned it for years. This is not a practice but a clear violationof the law. Moreover, as the CEO, Min Hee-jin has not taken any follow-upmeasures such as recovering the illegally received amount or imposingpenalties.
What are yourthoughts on this incident?
ADOR
It's similar tothe coercive audit that took place on the vice-president not long ago. HYBEwants to create problems that can be used to find fault with ADOR and CEO MinHee-jin by any means necessary. We had to disclose this first due to concernsthat it could be used for "unpl" (T/N: meaning unclear).
HYBE
CEO Min is wellaware that a large sum of money was received with her tacit approval. When HYBEHR inquired about the matter, CEO Min, despite knowing the severity of theissue, tried to brush it off as if it were nothing. Internally, she is tellingthe team leader to stop accepting money, using HYBE as an excuse. We stronglyexpress our regret towards CEO Min's side for attempting to mislead the publiconce again by releasing a statement based on false information. This is aserious defamation of the company.
Futureresponse?
ADOR
Mr. A isexpressing mental distress and anxiety. We plan to withdraw the consent for theuse of personal information. We are also considering filing a complaint forobstruction of business and coercion.
HYBE
We expect thatthe investigation process will clearly reveal where the billions of won inunfair profits received by Mr. A have flowed. We will take all possible civiland criminal measures regarding this matter.
