Shares of BTS agents plunge after audit announcement / Photo: Michael Tran - AFP
NYSE - LSE
Shares of BTS agents plunge after audit announcement
Shares of the South Korean agency behind K-pop sensation BTS dropped nearly 10 percent this week after the company announced a probe into its powerhouse subsidiary and demanded the resignation of a star producer.
The agency, HYBE, told AFP on Tuesday that it had launched an audit into its subsidiary label ADOR, which manages popular girl group NewJeans, a two-year-old K-pop phenomenon who have topped global charts.
The agency said it was investigating whether ADOR chief and famed superproducer Min Hee-jin was plotting to break away from the parent company, which holds a controlling 80 percent stake.
HYBE has "launched an audit into ADOR and sent a letter to Min demanding her resignation," a HYBE official told AFP.
As news of the feud emerged in the South Korean press Monday, HYBE's share price dropped 7.81 percent, before falling another 1.18 percent Tuesday.
The company's share price tumbled in 2022 when BTS announced they would go on "hiatus" -- before they all began enlisting in South Korea's mandatory military service. Vocalist Jin is set to become the first member to complete the duty in June.
HYBE claims that Min, who has a track record of successfully nurturing K-pop bands and also masterminded the creation of NewJeans, was seeking to independently manage the girl group.
But Min released a statement Monday calling the accusation "dumbfounding" and saying that tensions with HYBE began after she accused another of their subsidiaries of copying NewJeans.
"ILLIT has been copying NewJeans in entertainment activities ranging from hairstyle, makeup, dress, choreography, photography, videos and event appearances," she said, referring to a new girl group debuted by another HYBE subsidiary label.
NewJeans' achievements "have been gravely violated by HYBE", she said in a statement obtained by AFP.
HYBE is in a tricky spot as firing Min, who has been nicknamed "NewJeans' mum" for being in charge of everything related to the band, could put the "survival of the group at risk", Kim Do-hoon, a pop culture columnist, told AFP.
South Korea's unique entertainment business model, where agencies not artists typically hold all the power, means even chart-topping groups like NewJeans can fall prey to boardroom struggles.
"It vividly shows how vulnerable South Korea's intellectual property is to crumbling under the K-pop's factory-like production system when there's a dispute like this," Kim said.
"Removing Min from the equation... can bring NewJeans members who are still in their teens emotional damage much more than people expect."
P.Connor--NG
