HYBE can acquire Min Hee-jin’s shares for 3 billion won instead of 100 billion won if “breach of trust” is proven

According to Korea Economic Daily on May 1st, the ADOR shareholders’ agreement stipulates that HYBE has the right to purchase all shares held by CEO Min and others directly or through a designated third party if they breach the contract. The purchase price per share for the call option target shares is specified to be the lower of the par value per share and 70% of the fair value.

Normally, HYBE would have had to purchase shares at a level close to 100 billion won according to CEO Min’s put option exercise. However, if “breach of trust” is recognized, HYBE can buy these shares at the par value level based on the breach of the shareholders’ agreement. The purchase scale based on par value is estimated to be around 2.8 billion won for CEO Min’s shares and 3.2 billion won including the management. In this case, CEO Min, who borrowed 2 billion won to purchase 18% of the shares, might leave ADOR empty-handed.

In response, HYBE stated to News1 that they do not intend to respond to attempts to reduce the illegal takeover to a compensation dispute or revenge frame. They claimed that ADOR CEO Min Hee-jin’s side had meticulously planned for the illegal takeover. HYBE urged CEO Min to cooperate with the upcoming investigation by the authorities and await the court’s judgment, stating that legal review confirming sufficient grounds for breach of trust had already been completed, and other illegal acts had also been discovered.

HYBE entered an emergency audit after reporting that ADOR CEO Min Hee-jin and Vice-CEO A attempted a takeover on April 22nd. Subsequently, they filed a report to the Seoul Yongsan Police Station on April 25th, accusing CEO Min and A of breach of trust. However, CEO Min denied the breach of trust suspicion during a press conference on April 25th, stating that the messenger captures publicly released by HYBE had been manipulated. She claimed that she had never planned, intended or executed any takeover and stated that she was merely an employee and CEO with no motive for breach of trust.

Furthermore, HYBE demanded a board of directors meeting to replace ADOR’s management, including CEO Min, on April 22nd due to the attempted takeover. When CEO Min’s side refused, HYBE applied for permission for an interim shareholders’ meeting to the court on April 25th. Despite CEO Min’s side requesting a change in the trial date due to time constraints, it was not accepted, and the trial proceeded on April 30th as scheduled. Both sides refrained from further comments, stating that they had requested proceedings to be conducted in accordance with legal procedures.

Source: nate