‘Minhee Jin’s dismissal’ trial intensifies… How will the internal dispute in the Hive family unfold?

Court to reach interim injunction conclusion within 2 weeks after hearing
Dispute over contract violation, embezzlement, etc.
Hive raises additional suspicion of ‘use of undisclosed information’
Legal industry predicts “legal disputes will continue after public lawsuit”, “The trial that will determine the fate of the CEO position of Min Hee-jin, the CEO of Audu, will commence on the 17th.”, Ahead of Audu’s interim shareholders’ meeting, Min’s side has requested the court to prohibit Hive from exercising its voting rights in order to prevent Min’s removal during the meeting agenda of ‘CEO dismissal’,,
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, If the court rules in favor of CEO Min, Hive will not be able to remove her at the upcoming interim shareholders’ meeting. Conversely, if the injunction is rejected, CEO Min will have to step down from her management position immediately. However, the legal industry expects that “as this fight involves billions of won, even after the interim injunction conclusion, legal disputes will continue.”,
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Bang Si-hyuk, Chairman of Hive, and Min Hee-jin, CEO of Audu. [Image Source=Newsis], “Interim injunction decision hinges on content of shareholder agreement”,
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, ‘According to the legal industry on the 16th, the Seoul Central District Court’s Civil Conciliation Division 50 (Chief Judge Kim Sang-hoon) will hold an interim injunction hearing on the 17th at 10:45 a.m. Previously, Min’s side revealed the fact of applying for an injunction, stating on the 7th “Hive’s motion for CEO Min’s dismissal at the interim shareholders’ meeting constitutes a violation of the shareholder agreement concluded with Min.” Min appointed the law firm Sejong, and Hive, the defendant, appointed the law firm Kim & Jang as their legal representatives.’,
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, ‘Initially, if Hive, which owned 80% of Audu shares, supported the CEO Min’s dismissal at the interim shareholders’ meeting, her removal would have been inevitable. However, with Min’s injunction application, a new variable has emerged.’, An injunction to prohibit the exercise of voting rights is a procedure to prevent the exercise of the voting rights of the shares in a general meeting when there is a dispute or conflict in the transfer or receipt of shares or related to the effect of shares. Since it takes a long time for a conclusion to be reached in a separate (main) lawsuit, an injunction is sought to prevent urgent damage or risk. Typically, an interim injunction decision comes within 2 weeks after the hearing.,
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, ‘In the interim injunction hearing, the legal battle is expected to unfold based on the content of the shareholder agreement between Hive and CEO Min. Lawyer Park Seong-ha of Dongin Law Firm said, “Hive will argue that ‘exercising voting rights does not violate the contract,’ while CEO Min’s side will claim that ‘exercising voting rights in favor of the dismissal motion goes against the contract.”‘,
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, Yoo Tae-jung, ‘the director of Kwangya Law Firm, explained, “The main shareholder originally has the right to exercise shareholder rights, but in this case, they are asking to prevent the exercise of rights.” He further stated, “The court will examine whether there is a ‘special reason,’ namely, whether Hive has made a significant mistake, to restrict the voting rights. However, even if both sides have violations in this situation, it may be difficult to prevent the exercise of shareholder rights unless there are significant faults on Hive’s side,”,
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, ‘The length of service period in the shareholder agreement is also a point of contention. CEO Min’s side argues, “As the CEO for 5 years fulfilling duties, she cannot step down from her position.” This is to maintain the symbol of Audu, New Tin’s comeback on the 24th and ‘, to maintain the company’s value., ‘purpose.’,
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, “Prospects for prolonged civil and criminal disputes” … Embezzlement suspicions also on the table,
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, ‘Hive is expected to bring up allegations of embezzlement against CEO Min in court. On the 22nd of last month, Hive initiated an audit of Audu’s management team, citing an attempt to seize control, and accused CEO Min and others of professional embezzlement. Hive explained, “We have activated our audit rights as there are suspicions of leaking important information or attempting to take Audu’s management rights.” On the other hand, CEO Min’s side maintains that the embezzlement charges are unfounded.’,
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, Lawyer Park stated, “While there is a criminal aspect to this case, the civil court will also examine Hive’s claim that ‘illegal acts have occurred’ and will review the evidence supporting that.” , ‘Lawyer Yoo explained, “What’s important is the suspicion that Audu’s vice president took internal artist exclusive contract documents to Audu. If those documents were used to formulate strategies, issues could arise due to leaks of trade secrets or other violations.”‘,
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, ‘If the court rules in favor of CEO Min in this interim injunction, Hive cannot immediately remove her. Instead, they may appeal the injunction decision or present new evidence to convene another interim shareholders’ meeting.’,
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, ‘Conversely, ‘, if the injunction is rejected, Hive gains the upper hand in the power struggle for management control. , If CEO Min disagrees with the rejection , ‘or in the future, submits a new injunction such as “the shareholders’ meeting resolution should be nullified” or “recognition should be given for the CEO to retain his duties,”‘, the effect of the interim shareholders’ meeting conclusion (dismissal) will be maintained until a new decision is made. Lawyer Yoo stated, “If the dismissal resolution passes at the interim shareholders’ meeting, CEO Min will temporarily be unable to perform her duties.”,
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, ‘Additionally, there is a possibility of both sides seeking damages from each other, or New Tin supporting CEO Min may file an injunction request against Hive to suspend the effect of the exclusive contract.’,
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, “Deepening conflict amid renegotiation… Hive raises consecutive suspicions”,
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, ‘The legal industry views the essence of this dispute as a “money issue.” Lawyer Cho Sung-hee of D Legal Law Firm said, “This is a case commonly seen in the entertainment industry,” adding, “When the relationship between the parent company (investor) and the subsidiary (investee) deteriorates, it often comes down to a financial matter.” Another Lawyer Mo commented, “As specific contracts and articles of association are not publicly disclosed, both sides are engaging in public opinion warfare,” and said, “In disputes over management rights, parties often file lawsuits first and leave room for agreement later.”‘,
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, ‘The discord between Hive and CEO Min arose during the discussion on the “re”negotiation of the shareholder agreement and the assessment of stock value. According to the related industry, the shareholder agreement drafted by both sides states that “in case CEO Min or others breach the contract, Hive has the right to buy all the shares held by CEO Min and others.” CEO Min has the right to sell 13% of the company’s shares at a predetermined price starting from the end of this year out of her total 18% ownership, and the price was set at 13 times the average annual operating profit from the past two years. It is estimated to be around 100 billion won. The reason behind CEO Min’s denial of the suspicion of taking over management rights is that she would “earn 100 billion won by just staying idle.”‘,
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, ‘In this context, Hive emphasized that “during the contract negotiation process, CEO Min demanded to increase the multiple of the put option from the existing 13 times to 30 times.” CEO Min’s side countered that it was “based on reflecting the value of the upcoming boy group to be produced, and was just one of several proposals.” There is an obligation of non-competition after retirement until consent is obtained from Hive to dispose of all shares, and the agreement between shareholders needed adjustment in CEO Min’s case for the sale of 5% of her 18% stake without Hive’s consent.’,
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, “As negotiations turned sour, Hive brought up allegations of ‘an attempt to seize Audu’s management rights’ against CEO Min, while CEO Min’s side raised accusations of ‘copying and discrimination by Hive.’ This was followed by Hive’s abrupt audit of Audu’s management team and CEO Min’s press conference. If CEO Min’s contract violation is acknowledged, Hive can acquire CEO Min’s shares at around 30 billion won, which is at a nominal value of around 5,000 won per share.”,
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Yongsan Hive Headquarters. Photo=Reporter Jo Yong-jun jun21@,
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, ‘On the 14th, Hive claimed that “Audu’s management team used undisclosed information to gain unfair advantages ahead of the audit.” On the 15th of last month, Min’s close aide, Vice President A, sold 950 shares of Hive at 23.87 million won, and the next day, Min’s side sent an email to Hive’s management team raising various suspicions. Subsequently, Hive conducted a sudden audit of Audu under the pretext of ‘seizing control’ to preempt potential stock price declines due to public opinion battles.’,
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, “Together with this, Hive plans to request an investigation by the Financial Supervisory Service, accusing other Audu management teams, including CEO Min, of spreading ‘false information’ related to Hive that caused losses to investors. CEO Min’s side vehemently denies the allegations.”,
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