Summary:
Korea Startup Forum raises alarms over NewJeans' contract termination.
The forum warns of potential investment-related impacts on the startup ecosystem.
Unilateral contract terminations could undermine trust and legal stability.
Investor sentiment has weakened significantly after NewJeans' announcement.
Ador has filed a lawsuit to confirm the validity of contracts with NewJeans.
By Nam Hyun-woo
The Korea Startup Forum, the country’s leading startup organization, has raised serious concerns regarding the potential investment-related impact stemming from K-pop girl group NewJeans' recent decision to terminate its contract with management agency Ador.
In a statement released on Monday, the forum described NewJeans’ announcement as “a significant case that could seriously undermine the principles of trust and responsibility,” which are vital to the investment ecosystem. They expressed worries that such unilateral actions could compromise the legal stability of the investment environment, threatening the very foundation of the startup ecosystem.
The forum highlighted that NewJeans’ unilateral interpretation and invalidation of its management contracts could erode market trust in investment agreements, potentially weakening investor sentiment. They stated, “(The accumulation of) incidents of unilateral contract nullification can significantly dampen investor sentiment, transcending individual agreements to damage trust in Korea's startup ecosystem as a whole.” Following the announcement, it was noted that investor sentiment has rapidly diminished.
During a press conference on November 28, members of NewJeans announced their decision to terminate their contracts with Ador, citing a lack of willingness from HYBE or Ador to improve their situation or meet their demands. This move follows a dispute between Min Hee-jin, former CEO of Ador, and HYBE, which resulted in Min's removal from her position by the board.
On December 5, Ador responded by filing a lawsuit with the Seoul Central District Court, seeking legal confirmation of the validity of its contracts with NewJeans, asserting that “the contracts cannot be nullified by one side’s unilateral demand.”
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