Why ADOR is Under Audit
An explainer about the current dispute between ADOR and parent company HYBE.
News recently broke that entertainment company HYBE has requested an audit into the subsidiary ADOR. Here’s what’s going on:
First of all, what is ADOR?
ADOR is the company that brought mega-successful girl group NewJeans into the world back in 2022. ADOR’s CEO is Min Hee-jin, who famously worked for SM Entertainment before founding ADOR.
What is an audit?
An audit is an inspection by an external party of a company’s financial records. The goal is not necessarily to find evidence of wrongdoing; it’s just an evaluation of the credibility of a company’s financial statements.
Why did HYBE request an audit of ADOR?
HYBE is literally invested in the financial status (and related public image) of ADOR! HYBE owns 80% of ADOR’s shares. Additionally, HYBE claims there is reason to be suspicious of how ADOR has represented itself to the public.
What does HYBE allege?
HYBE alleges that there have been steps taken towards a complete spin-off of ADOR; ADOR is accused of improperly trying to sever all ties with HYBE. The alleged improper behavior towards this goal includes disclosing confidential information to outside parties, trying to sell shares, and otherwise trying to create a narrative that paints ADOR as better off without HYBE. HYBE accuses ADOR of making this argument in unfair, and possibly illegal, ways.
What does HYBE want to see happen?
Korean media outlets are reporting that HYBE has formally requested Min Hee-jin’s resignation, as well as the replacement of ADOR’s top brass. Beyond that, not much is known about what it wants; HYBE’s statement confirming the audit simply states “It is true that an audit was initiated.”
What does ADOR allege?
ADOR acknowledges the comparisons made between NewJeans and ILLIT, a rookie girl group under a different HYBE subsidiary, BELIFT LAB. ADOR accuses HYBE of copying NewJeans and trying to paste the same creative vision onto ILLIT. To paraphrase, ADOR’s argument is that “Just because you own Company A and Company B doesn’t mean you have the right to take ideas from A and replicate them in Company B, or vice versa.”
Shortly after news broke about HYBE requesting an audit, ADOR released a statement saying, in part:
“HYBE… is blinded by short-term profits and is mass-producing unoriginality by copying successful cultural content without hesitation...”
What does ADOR want?
ADOR seeks an apology from HYBE and BELIFT LAB, but the form in which ADOR wants them to make amends remains unspecified. Additionally, ADOR says it “does not want NewJeans and ILLIT to be associated in any way,” and it says the argument that Min Hee-jin needs to resign is nonsensical when claiming it is in the interest of preserving ADOR’s corporate value:
“It is incomprehensible how a legitimate complaint to protect the cultural achievements of our artist… could harm ADOR’s interests or… be an act of seizing control of ADOR.”
Calls for ADOR’s CEO to step down are seen as flimsy excuses; ADOR argues that it actually helps preserve the company’s corporate value to keep Min Hee-jin on board and continue the fight for individual intellectual property rights.
What remains unknown
The tipster who led to HYBE launching the audit in the first place remains anonymous. Also, as of publication time, the audit’s findings are not known, nor are the details of the next moves each party is seriously contemplating.
What happens now?
Some possibilities include the following:
HYBE takes legal action against ADOR, for defamation, disclosing classified information, or both.
ADOR takes a legal battle head-on for copyright infringement remedies and/or a full severance from HYBE.
There is a “water under the bridge” discussion, in which people from ADOR and HYBE meet and reach a compromise. For example, ADOR might agree to make some leadership changes if HYBE promises to not pursue litigation.
The dispute is drawn-out and kept under wraps; the public is left to speculate about how the meetings are going for an extended period of time.
Hope’s Take
I see this as a much more complicated debate than “Which side is telling the truth?” There could be merit to HYBE accusing ADOR of trying to spin off completely and merit to ADOR’s claim that HYBE gave ADOR a legitimate reason to want to spin off in the first place. If it is true that ADOR has been looking for a way to spin off, whether or not they have used improper, if not illegal, means to do so is up for the legal system to determine.
I also view “Did BELIFT LAB copy ADOR?” as deserving more than a yes-or-no answer. As I previously wrote about, there are lots of similarities between ILLIT and NewJeans, but I see many distinctions between them too. I am still contemplating whether or not I believe that BELIFT LAB crossed the line between drawing inspiration and overt copying; I see reasons to think they did and to think they didn’t.
Artists influence each other all the time, and it can be subconscious or just for marketing-based reasons. After all, if a business sees other businesses in the same industry making certain moves that are succeeding, that business will likely try the same moves. That’s how trends form; companies pursue what’s resonating with consumers. NewJeans’ sound and style have been a big hit, so of course other musicians are now being marketed in ways that seem NewJeans-inspired! That’s what’s “in” right now!
Again, I am not sure whether or not this is a case of BELIFT LAB “stealing” from ADOR or merely following a trend, although at this moment, I am leaning towards the latter argument. I have yet to see solid evidence of BELIFT LAB following more than a metaphorical ADOR playbook, but my view will totally change if it turns out BELIFT LAB used a literal playbook they took from ADOR! If BELIFT LAB got its ideas from an actual physical blueprint for creating a winning group, that obviously deserves to be seen as a theft of trade secrets more than just making a mental note of what the competition is doing.
The question of when imitation becomes outright copying, rather than flattery, will always remain up for debate, and so much about the true backstory leading up to this dispute remains out of the public domain that standing entirely on either party’s side seems premature. There is so much to this story about which the air has not yet cleared.
This is a quickly-moving story, so keep in mind this is just where things stand as of the morning of April 22, 2024.
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