The Korea Startup Forum (KOSPO) expressed concerns regarding the conflict over the investment contract involving the group NewJeans, HYBE, and its subsidiary ADOR.
On the 23rd, KOSPO issued a statement saying, "The recent conflict regarding the investment contract between HYBE and its subsidiary is a significant case that could seriously undermine the principles of trust and responsibility, which are the foundation of the investment ecosystem."
KOSPO is an organization that was established in September 2016 by over 50 startups to support the development of the startup ecosystem and represent common interests.
KOSPO expressed "deep concerns that such a situation could undermine the legal stability of the investment environment and threaten the foundation of the startup ecosystem," stating, "Investment contracts are legally binding promises based on mutual trust. If the interpretation and execution of contracts are unilaterally invalidated, it will undermine the essence of investment decisions and lead to irreparable distrust across the entire investment ecosystem."
This reflects concerns regarding the conflict between ADOR and NewJeans, as well as the conflict involving Min Hee-jin, regarding the validity of the exclusive contract.
KOSPO stated, "The decline in social trust regarding the execution of investment contracts seriously dampens investment sentiment and has a fatal impact on the entire ecosystem," adding, "This could sharply reduce investors' willingness to invest, leading to a decline in trust in the entire Korean startup ecosystem beyond individual contract issues. If foreign investors' trust in the Korean market is damaged, global investment attraction will be hindered, limiting growth opportunities for domestic startups, which will ultimately weaken the competitiveness of the Korean startup ecosystem."
KOSPO reported that, in fact, investment sentiment in the entertainment industry has sharply declined following the HYBE incident.
Finally, KOSPO emphasized that the essence and principles of investment contracts and the importance of social trust have been reaffirmed, expressing "deep concerns that the healthy development of the startup industry and the investment environment may be seriously undermined."
NewJeans held an emergency press conference on the 28th of last month and announced the termination of their exclusive contract with ADOR. Since then, the members have been participating in various events but are promoting themselves using their individual names without directly mentioning "NewJeans." Former ADOR CEO Min Hee-jin also resigned from her position as an inside director and left HYBE.
The members of NewJeans have mentioned their intention to continue working with former ADOR CEO Min Hee-jin in the future. ADOR has filed a lawsuit to confirm the validity of the exclusive contract, claiming that the contract is valid until July 2029.
