Get ready for a rollercoaster ride because Min Hee Jin’s in a tight spot. She could lose a whopping $80 million, and there’s talk about her possibly leaving ADOR with nothing. It’s like watching a suspense movie unfold! Stick with us as we dig deeper into the situation, figure out what’s really going on, and see if Min Hee Jin can come out on top.
Min Hee Jin Faces $80 Million Loss And Embezzlement Allegations At ADOR
In the middle of the growing legal battle between HYBE and its subsidiary ADOR, the shareholder agreement’s call option comes to light. Last month, HYBE sued ADOR’s CEO, Min Hee-jin, alleging misappropriation of company funds. HYBE might pay roughly $2.4 million to repurchase Min’s shares if it can provide proof of the embezzlement.
#ADOR CEO Min Hee-jin could go bankrupt if found guilty of embezzlement?!https://t.co/bJMWd6ubFG
— TIMES NOW (@TimesNow) May 1, 2024
The possibility of buyback arises from a call option contained in the shareholder agreement amongst the shareholders of ADOR. This option specifies that “HYBE has the right, directly or through a designated third party, to buy all shares held by Min or others in case of a contract violation by Min or others.” The call option’s price for these shares is determined by dividing the nominal value per share by 70% of the fair value.
Repurchasing these shares at face value may be possible if HYBE’s accusations of embezzlement are validated as a breach of the shareholder agreement. Based on ADOR’s $12.8 million registered capital and the $4 stated nominal value of its shares, Min’s investment is valued at $2.2 million, with an additional $2.6 million including management.
Originally, Min had a put option that, according to some estimates, was worth around $80 million, allowing her to sell her 18% firm ownership at a set price at the end of this year.
Min might therefore end up with nothing after quitting her CEO job since her potential gain could drop sharply from $80 million to less than $2.4 million. This could give rise to further legal disputes.
Furthermore, reports indicate that Min tapped into around $16 million, borrowed directly from HYBE chairman Bang Si-hyuk, to exercise her call option and buy an 18% stake in ADOR last year. If she has to pay back this loan, it’s speculated that Min could end up with virtually nothing left.
While the exact terms of the shareholder agreement remain undisclosed, the industry is concerned about the embezzlement charges filed by HYBE. There’s talk about potential legal issues related to unfair competition laws and trade secrets protection, which Min might have to face in a tough legal battle. These challenges could make it difficult for HYBE to exercise its call option.
In another development, HYBE called for a board meeting last month with the aim of replacing the management team at ADOR, which includes Min Hee Jin. However, the meeting didn’t happen because Min declined to organize it.
As a result, HYBE has taken the matter to court, seeking approval to hold a general shareholders meeting. If the court gives the green light, there will be an extraordinary general shareholders meeting. At this meeting, HYBE intends to propose resolutions to remove Min Hee Jin from her position and appoint new directors at ADOR.
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