Record giant HYBE audits 'NewJeans' label as infighting returns to K-pop

Ador Fontech

24/04/2024 10:47

By Hyunsu Yim
       SEOUL, April 24 (Reuters) - South Korea's largest music
company is auditing the management of one of its labels as it
suspects they are planning to break away, the latest case of
infighting in K-pop, one of the world's most popular and
profitable music industries.
    HYBE  352820.KS  houses multiple labels behind globally
renowned groups including BTS and Seventeen, and its shares fell
nearly 8% on Monday largely due to the internal dispute. 
    A HYBE representative told Reuters in an email on Wednesday
that the audit was launched earlier this week on suspicion that
Min Hee-jin, CEO of sub-label ADOR, was plotting to become
independent, and take over management rights of the artists the
label represents.
    Min is credited with creating popular girl group NewJeans,
and together with other executives owns a 20% stake in ADOR.
NewJeans is set to release a new single next month.
    Earlier this week, Min denied HYBE's allegations in a
statement to local media, and accused the company of infringing
on her intellectual property rights.
    The law firm representing Min declined to comment.
    The dispute is one of several to hit the industry in recent
years as it continues to grow globally.
    Last year, the takeover of SM Entertainment  041510.KQ  by
South Korean social media giant Kakao  035720.KS  triggered an
internal battle over management.
    Fifty Fifty, a girl group behind TikTok hit "Cupid," also
saw their career fizzle out following a legal battle with its
agency Attrakt in 2023.
    The K-pop industry is suffering "growing pains" which are
affecting its shares in the short-term, said Soo-jin Lim, an
analyst at Daishin Securities. 
    "After going through this process, things might move in a
direction where agencies can better protect their artists and
intellectual properties," Lim said.
    In a report on Tuesday, analyst Oh Ji-woo at eBest
Investment & Securities, said HYBE shares will be volatile for
some time following the audit.
   K-pop is one of South Korea's biggest cultural exports,
accounting for nine out of the 10 most-sold albums in 2023 and
selling tens of millions of units, according to the
International Federation of the Phonographic Industry (IFPI).

 (Reporting by Hyunsu Yim; editing by Miral Fahmy)
 ((Hyunsu.Yim@thomsonreuters.com;))