The Korea Startup Forum (Kospo) has expressed concern over the ongoing conflict between HYBE and its subsidiary, ADOR, regarding the investment contract surrounding the group NewJeans.
In a statement released on December 23rd, Kospo warned that “the recent conflict between HYBE and its subsidiary over the investment contract is a serious issue that could undermine the principles of trust and responsibility, which are the foundation of the investment ecosystem.”
Kospo, an organization founded in September 2016 by approximately 50 startups, aims to support the development of the startup ecosystem and represent shared interests.
Kospo expressed “deep concern that this situation could undermine the legal stability of the investment environment and threaten the very foundation of the startup ecosystem.” It criticized the situation, stating, “An investment contract is a legally binding promise based on mutual trust. If the interpretation and execution of the contract are unilaterally nullified, it will damage the essence of investment decisions and create widespread distrust across the investment ecosystem that will be difficult to recover.” The statement highlights the conflict between ADOR, NewJeans, and Min Hee Jin regarding the continuation of the group’s exclusive contract.
Kospo pointed out that “a decline in social trust regarding investment contract performance seriously dampens investment sentiment and has a fatal impact on the entire ecosystem.” It added that this erosion of trust “reduces investors’ willingness to invest and could damage the entire Korean startup ecosystem, far beyond individual contracts. If overseas investors lose trust in the Korean market, global investment attraction will decrease, limiting growth opportunities for domestic startups and weakening the competitiveness of the Korean startup ecosystem.”
According to Kospo, investment sentiment toward the entertainment industry has already been negatively affected by the recent incident involving HYBE.
Finally, Kospo stressed the importance of adhering to the principles of investment contracts and maintaining social trust. It expressed “deep concern that the sound development of the startup industry and the investment environment could be seriously dampened.”
The controversy began on November 28th, when NewJeans held an emergency press conference to announce the termination of their exclusive contract with ADOR. Since then, the group members have been active in various events but have avoided using the name “NewJeans,” instead promoting themselves under their individual names.
Former ADOR CEO Min Hee Jin also resigned from her position as an internal director at HYBE and left the company. The NewJeans members have expressed their intention to continue working with Min Hee Jin in the future. Meanwhile, ADOR has filed a lawsuit to confirm the validity of the exclusive contract, claiming it remains in effect until July 2029.
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