Hive can acquire Min Hee-jin’s share of Adore for 3 billion won instead of 100 billion won if it proves that it is guilty of breach of trust.

2024-05-01 04:37:34

A hearing will be held regarding Hive‘s application for permission for Adore‘s extraordinary general shareholders’ meeting. The Seoul Western District Court will hold a hearing regarding Hive’s permission to convene a general shareholders’ meeting on the afternoon of the 30th. On the 22nd, Hive wrote to Adore management, including CEO Min Hee-jin, requesting that the board of directors be convened to hold an extraordinary general meeting of shareholders. However, CEO Min sent a reply refusing to hold a board meeting, saying that Hive’s request to replace Adore’s CEO and internal board members was illegal. The photo shows the Hive office building in Yongsan-gu, Seoul on this day. 2024.4.30.News 1

While Hive and Min Hee-jin, CEO of Adore, a label and New Jeans agency, are engaged in a legal battle over suspicions of an attempt to steal management rights, it is known that the amount of CEO Min’s stake that Hive will acquire will vary greatly depending on whether or not ‘business breach of trust’ is proven.

According to the Korea Economic Daily on the 1st, the Adore shareholder contract stipulates in Article 11 of the compensation clause, ‘If CEO Min, etc. violates the contract, Hive may purchase all of the stocks held by CEO Min, etc. directly or through a third party designated by Hive. It is reported that it clearly states that ‘at this time, the trading price per share for stocks subject to a call option shall be the lesser of the par value per share or an amount equivalent to 70% of the fair value.’ .

Originally, Hive would have had to purchase the shares at a level close to 100 billion won following CEO Min’s put option exercise, but if ‘business breach of trust’ is recognized, Hive would have purchased these shares at face value on the basis of violation of the shareholder agreement. You can. The purchase size based on face value is estimated at 2.8 billion won for CEO Min’s stake and 3.2 billion won including management. In this case, CEO Min, who borrowed 2 billion won in purchase funds when purchasing an 18% stake, may have to leave Adore empty-handed.

On the 22nd of last month, Hive began an emergency audit after reporting that Adore CEO Min Hee-jin and Vice President A attempted to seize management rights. Then, the next day, through an interim audit report, they announced that they had secured evidence of breach of trust by Vice President A, including CEO Min, and reported them to Yongsan Police Station in Seoul on charges of breach of trust. However, Representative Min held a press conference on April 25th and completely refuted this.

In addition, Hive requested on the 22nd of last month to convene the board of directors to replace Adore executives, including CEO Min, on the grounds that they had attempted to seize management rights, but when Adore did not comply, it applied to the court for permission to convene an extraordinary general meeting of shareholders on the 25th. Accordingly, Representative Min applied to change the interrogation date due to lack of time, etc., but it was not accepted and the case continued on April 30. Both sides said, “We have nothing to say as it was conducted in private,” and said, “We requested that it be carried out in accordance with legal procedures.”

Currently, Adore’s majority shareholder is Hibro, which owns 80% of the shares, and CEO Min cannot prevent the dismissal of CEO. It is expected that it will take about two months for the management to be replaced.

(Seoul = News 1)

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2024-05-01 04:37:34