Mkhon Hyup, Min Hee-jin's 'Foot Option' in favor of "K-pop Industry Fatal Action." [Professional]

*This content was translated by AI.

The Korea Music Contents Association (hereinafter referred to as the "Mcon Association") expressed regret over the first trial's ruling on the validity and termination of the contract between Hive and former CEO of ADOR Min Hee-jin.

On the 20th, the Mcon Association said in its official position, "We are very concerned as an organization that strives to develop and promote the K-pop industry after hearing the first trial ruling between Hive and former CEO Min Hee-jin."

"In this ruling, the criteria for judging 'trust relationship breakdown' are very different from those considered by the industry, and we viewed the essential and essential element of trust relationship breakdown too narrowly," he said. "On the contrary, we are concerned that by setting the criteria for judgment excessively high, actions that can be recognized as tampering (an act in which a third party induces departure during the exclusive contract period) in the industry are likely to be interpreted as legitimate management actions or accepted as actions that do not involve real responsibility."

Mkhon Cooperative said, "We cannot help but question whether the duty of loyalty to the company and shareholders required by the Commercial Act in the performance of the CEO's duties can coexist with tampering. "This is because the K-pop industry's foundation is shaking as the contract order and the stability of the investment environment are fundamentally denied," he pointed out.

"The same will be true of all industries, but even more so, the K-pop industry is run on trust. In the trust-based K-pop industry, if the representatives of affiliates or key management seek independence as a new company by pulling out successful artist IPs using unfair methods, this will inevitably be a significant blow to the stability of governance and investment predictability across the industry," he added.

"I don't think this issue is just a problem for the K-pop industry," Mkhon said. In all content and intellectual property (IP)-based industries based on contracts, how far to tolerate conflicts of interest and destruction of trust of key personnel is a matter of determining the norms of the entire market, he said. "Once a precedent is created, it affects transaction practices and investment judgments across the industry beyond individual cases."

He also emphasized, "Tamping is not just a contract dispute, but a fatal act that destroys the trust of the industry, and it is an act that undermines the long-term pre-investment structure from the root."

The Mcon Association said, "We strongly ask that you consider the impact of this issue on all IP industries as well as the K-pop industry in subsequent legal proceedings such as appeals." In particular, we look forward to establishing a clearer and more balanced standard so that the meaning of "trust relationship breakdown" and the management's duty to prevent conflicts of interest are not reduced to formal ones in the K-pop industry, which has grown based on the trust of investors and producers, he said.

Meanwhile, the Seoul Central District Court's Civil Agreement Department 31 (Chief Judge Nam In-soo) ruled in favor of the plaintiff in a lawsuit filed by former CEO Min against Hive on the 12th. Hive's lawsuit against former CEO Min to confirm the termination of the contract between shareholders was dismissed.

The court said, "Hive should pay 25.5 billion won worth of put options to former CEO Min." He ordered the payment of 1.7 billion won to former vice-chairman Shin, who was classified as a close aide to former CEO Min and filed a lawsuit together, and 1.4 billion won to former director Kim.

Afterwards, Hive said, "It is regrettable that our arguments have not been fully accepted," adding, "We will proceed with future legal proceedings, including appeals, after reviewing the judgment."

The Korea Music Contents Association (hereinafter referred to as the "Mcon Association") is deeply concerned as an organization that strives to develop and promote the K-pop industry after hearing the first trial ruling between Hive and former CEO Min Hee-jin.

Today, the K-entertainment industry, which is in the spotlight and praise of the world, has grown based on mutual trust between capital investors and capability contributors. Talent is difficult to blossom without investment, and investment without capacity contribution cannot have meaning. This is because it is an essential cooperative relationship, whether large or small.

The core of the K-pop industry lies in the structure in which agencies take enormous pre-investment and risks in the early stages when success is not guaranteed, but share the subsequent realized performance in a contract and trust relationship. If the structure is shaken, the sustainability of the industry will also be severely affected.

In this regard, we are concerned that the criteria for "trust relationship breakdown" are very different from those considered by the industry, and that by overlooking the essential and essential trust relationship breakdown behavior, on the contrary, by setting the criteria too high, what can be perceived as tampering in the industry is likely to be interpreted as a legitimate management act or an act that does not involve real responsibility.

In performing the CEO's duties, we cannot help but question whether the duty of loyalty to the company and shareholders required by the Commercial Act can coexist with tampering. This is because the K-pop industry is shaking its foundation as the contract order and the stability of the investment environment are fundamentally denied

The same will be true of all industries, but even more so, the K-pop industry is built on trust. In the trust-based K-pop industry, if the representatives of affiliates or key executives seek independence as a new company by taking out successful artist IPs through unfair means, this will be a significant blow to the stability of governance and investment predictability across the industry. Such actions will lead to a contraction in investment within the industry, which can damage small and medium-sized agencies, new talent development, and workers in the industrial field as a whole. If this behavior is tolerated, which investors would invest their capital in fostering new artists and establishing new labels at the risk of long-term uncertainty. The first thing that shakes the moment capital dries up is small and medium-sized agencies, fostering new people, and numerous workers in the field.

The Mkhon Cooperative believes the issue is not just a matter of the K-pop industry. In all content and intellectual property (IP) based industries based on contracts, how far to tolerate conflicts of interest and destruction of trust by key personnel is a matter of determining the norms of the market as a whole. Once created, precedents affect trading practices and investment judgments across industries beyond individual events.

Tamping is not just a contract dispute, it is a fatal act that destroys the trust of the industry, and it is an act that undermines the long-term pre-investment structure from the ground up.

Mkhon Cooperative strongly requests that you consider the impact of this issue on all IP industries as well as the K-pop industry in subsequent legal proceedings such as appeals. In particular, in the K-pop industry, which has grown based on the trust of investors and producers, we hope to establish itself as a clearer and more balanced standard so that the meaning of "trust relationship breakdown" and the management's duty to prevent conflicts of interest are not reduced to formal ones. In addition, the Mcon Association will make every effort to establish industry order and protect the production system in order to prevent the spread of tamping and similar activities that can shake the foundation of the Korean K-pop industry.

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*This content was translated by AI.