Min Hee Jin and HYBE have shared their sides of the story regarding the audit of an ADOR employee yesterday.

On the morning of May 10, Min Hee Jin released the following statement:

Ahead of ADOR’s board meeting today, we want to address the unfortunate incident where an ADOR employee suffered due to an illegal audit based on irrational issues raised by the HYBE audit team until the early hours of today.

The HYBE audit team began an audit of ADOR’s style directing team leader after work hours at around 7 p.m. on May 9. The audit continued for over five hours, past midnight into May 10, and they followed the relevant employee who was working at the office to her home, demanding not only her laptop but also her personal cell phone not owned by the company and carrying out an audit beyond the scope of work. Moreover, the audit team committed irrational behavior including severe threats such as, “You have to go to the police station if you don’t cooperate,” abusing their authority to audit and psychologically pressuring our employee. Carrying out the coercive audit despite being informed of [the employee having] scheduled activities early in the morning is clearly interference with business.

According to the employee, the HYBE audit team raised issues regarding the contractual relationship between ADOR and the style directing team leader, applying psychological pressure with statements like, “As the circumstances of embezzlement and breach of trust are clear, we plan to file a complaint.” However, such contractual relationships are common practice in the industry, and this information had already been shared with HYBE’s HR and ER departments in February. This information could have been easily understood without the unpleasant audit of the employee.

Typically in the advertising industry, external freelancers for hair, makeup, and styling are employed during shoots, with separate contracts signed between advertisers and freelancers.

For NewJeans’s advertising shoots, ADOR utilized internal staff for styling instead of external personnel. This approach ensured consistent quality of styling, flexibility in sudden schedule changes, and helped manage artists’ privacy. The internal staff were compensated for styling costs directly by the advertisers, and ADOR considered these payments when calculating the internal staff’s incentives.

In the process of calculating performance bonuses for 2023, it was determined that it would be difficult to manage all styling work internally due to NewJeans having more advertising shoots than expected and the increase of additional duties other than advertisements. Accordingly, it was agreed that from 2024 onwards, the work procedure will be revised and styling for advertising shoots will be outsourced. And this decision was already shared with HYBE’s HR and ER departments previously in February. What HYBE is currently taking issue with is actually internal employees receiving the amount that advertisers pay to freelancers instead of receiving incentives from ADOR, and as there was no financial harm to ADOR, embezzlement cannot be established contrary to what is being claimed by HYBE. This matter can be easily verified through records of HR services provided by HYBE as shared services.

Despite the fact that an agreement had been reached between the parties through a rational decision-making process on this matter, HYBE not only abruptly initiated an unreasonable audit of the style directing team leader yesterday but also committed acts that are beyond normal corporate conduct including following a female employee to her home late at night past 10 p.m. and forcing her to sign a form to consent usage of her laptop. The fact that HYBE claims, “It is clear evidence of embezzlement and breach of trust,” despite there being no issues with the procedure or content proves that HYBE management lacks understanding of the industry. The method of this audit also constitutes illegal actions such as interference with business, coercion, and invasion of privacy.

ADOR takes this matter seriously as it shows HYBE’s intent to find faults with ADOR and CEO Min Hee Jin in whatever way possible as they did with the previous coercive audit of the vice president. After announcing the audit to the media on April 22, HYBE has been conducting a smear campaign in various ways using media outlets. Due to concerns that this coercive audit could also be used for media play, we decided to transparently reveal the facts about this ahead of time.

The employee involved is currently experiencing mental distress due to uneasiness. We plan to withdraw the consent to use personal information that was obtained under a coercive situation that lasted more than five hours, and we are also considering filing a legal complaint for interference of business and coercion.

HYBE management shows a lack of industry understanding by framing a transaction conducted reasonably as embezzlement without considering the specifics of the job. It is clear who is causing inefficiency and interference with business under the guise of an audit.

Following Min Hee Jin’s statement, HYBE replied with the following statement:

This is a notice from HYBE.

We inform that the audit conducted by our audit team on the evening of May 9 regarding the ADOR team leader was carried out legally and in a non-coercive manner with the consent of the auditee.

We would like to clarify the false claims made by CEO Min Hee Jin as follows:

Regarding the claim that the audit lasted from 7 p.m. until past midnight

The team leader arrived at the office at 6 p.m. yesterday. She received a call from the audit team on the way to the office, and the audit began after the team leader replied that she would agree to start the audit at 7 p.m.

Regarding the claim of coercing [the audit] after following a female employee to her home late at night after 10 p.m.

During the audit process, the team leader admitted to having received hundreds of millions of won worth of money and valuables from outsourcing companies over several years with the approval of Min Hee Jin. The team leader then expressed willingness to submit her personal laptop left at home. Consequently, with her consent, only a female employee accompanied the team leader into her home to retrieve the laptop.

Regarding the claim of forcing consent to use personal information

The team leader who is the auditee consented to the use of her personal information and expressed her intent to cooperate, even submitting her laptop.

Regarding the claim of demanding the collection of her personal cell phone

CEO Min Hee Jin and some ADOR employees did not use the official company messaging application for work conversations at all, carrying out all business conversations only via KakaoTalk. Although the audit team requested the submission of data stored on the cell phone, the team leader did not comply, and the audit team did not request any further.

Regarding the claim that it is a common practice in the advertising industry and embezzlement cannot be established

There is no such practice where a company’s full-time employee directly receives hundreds of millions of won in benefits from advertisers. The fact that such amounts, which should be recognized as company revenue, were privately handed over and that the CEO knowingly tolerated this for years is not a practice but a clear illegality. Moreover, Min Hee Jin has not initiated any follow-up measures such as recovery or penalties for the illegal payments. We expect that the whereabouts of the hundreds of millions of won worth of unjust profits received by the team leader will be clearly revealed through further investigation.

We are disclosing part of the conversation between Min Hee Jin and the ADOR management team related to this matter, as confirmed during the audit process, attached below.

Min Hee Jin is well aware that a significant amount of money and valuables was received under her tacit approval. When HYBE HR inquired about the matter, Min Hee Jin treated it like it was no big deal even when she knew how serious this matter is. Then, she internally discussed ceasing the team leader’s acceptance of money and valuables, using HYBE as an excuse.

We express our strong regret toward Min Hee Jin’s side for issuing a statement based on false information, attempting to mislead the public once again. This is serious defamation of the company.

We also express our strong regret about the team leader involved not being protected but instead being specifically identified to the media. This audit was conducted on an ADOR employee, not an executive, and HYBE had no intentions to disclose this matter to the media. However, with Min Hee Jin’s statement, the entire nation became aware of the audit. If Min Hee Jin had any intention of protecting her employee as her boss, she should not have done so.

We will take all possible civil and criminal legal actions regarding this matter.

These are the KakaoTalk messages attached by HYBE:

Min Hee Jin: So here’s what will be said at the meeting tomorrow (both of you listen carefully)

Good work the past year (introduction nothing more than a formality), since ___’s incentive is replaced by the advertising fee, mention the exact amount so that they can know that the advertising fee was ___won.

Make them aware that it is a large amount (surprisingly, this is someone who can pretend not to know that it is a large amount even if they do know)

Sometimes we should cosplay like lacking social skills in order to make people aware

1. Use HYBE as an excuse to notify about changes in advertising-related tasks by saying that HYBE tackled this matter.

(It is the basic guideline that concurrent employment is prohibited in HYBE, but actually I permitted this under my authority. But since a risk has surfaced, it would be foolish to explain the situation in a way that will direct the resentment toward ADOR)

Humans are cunning so say they are grateful when they receive an unexpected benefit, but they are not really good at evaluating the extent of the benefit. However, when they are put in the same situation as others due to a penalty (even though there is no loss in reality), it is common for them to feel resentment.

You know what I mean, right

Lee: Yes

S: Yes

Min Hee Jin: So in times like this, we should use HYBE.

When else would we get to use HYBE

There is an actual possibility of problems occurring in terms of HR.

HYBE requested corrections and improvements. Saying it like this will be less painful for them

Anyway, moving on, that is that, but there are criticisms that there are many problems within ADOR as well.

Continuing with

(We should never make adjustments based solely on the HYBE’s attacks. If we do so, this may result in their lack of awareness of the work that was handled wrongly by themselves.)


2. List the problems and make them aware of the need for corrective action for improvement.
Actually, this is the most important part. / The problem of individuals monopolizing labor costs has caused other employees to feel deprived (in fact, if the managers want to bring up problems, they can raise issues even now) This may have already been mentioned in 1, but it needs to be said again.

___ is a ___ person so we need to specifically let them know what kind of problem this is.

S: Okay

Min Hee Jin: Isn’t the advertising fee received all alone, don’t you think it is a problem that the assistants are working without getting paid? Honestly, when we first gave permission,
it didn’t occur to us that we should think about this matter seriously either. (Because at that time, there were too few assistants, and they were considered more like part-timers)

In fact, there is this problem because ___ voluntarily disclosed this to us first.

Maybe it should’ve been done, but it wasn’t

In fact, we just took advantage of the situation on purpose (making an excuse for being short-thinking). ___ also

S: Yes

Lee: In the beginning, Min Hee Jin was being considerate, but as the advertising amount grew,

1) A structure where the compensation for areas other than the main job gets too large,
2) A structure where the team’s resources work for ___’s personal reward.
3) The issues where the limited resources affect the schedule

These problems are in a situation where individual efforts alone are not enough, but it can only be resolved through changing the work process/structure.

Min Hee Jin: Yes, this is actually a big problem internally as well

This is also a task we must resolve first before being caught by HYBE

Audit issues may arise, actually.

ADOR also announced that an extraordinary general meeting (EGM) of shareholders will be held later this month. They stated, “Today (May 10), all involved individuals including auditors attended the board meeting, and it was decided that an EGM will be held on May 31. The agenda for the EGM was decided to be the content requested by HYBE.”

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