South Korea's largest K-pop agency Hybe accuses sublabel executives of breach of trust

South Korea's largest entertainment agency Hybe is set to file an official police complaint against executives of its sublabel ADOR on charges of breach of trust and other offenses.

The move comes after Hybe, which manages K-pop sensation BTS, opened an audit into ADOR on April 22 over allegations that CEO Min Hee-jin was aiming to take the sublabel independent. A Hybe statement sent to CNBC said the company also called for Min to step down.

Min denied the allegations and accused Hybe of copying the concept of ADOR's girl group, NewJeans, for another girl group under a different Hybe subsidiary.

Hybe also told CNBC that it has substantial evidence that Min sought to seize control of the sublabel, stating that "the evidence included detailed discussions that Min has ordered the ADOR management to find ways to pressure HYBE into ultimately selling ADOR's shares."

Reports from South Korean media show a screenshot provided by Hybe of a message between Min and ADOR's vice CEO. In the message, the vice CEO outlined various methods to take the label independent, including approaching other investors and convincing Hybe to sell its stake in the sublabel.

Hybe added that one of the audited parties "submitted information assets to seize the management of ADOR and to attempt to contact external investors. The auditee also admitted to creating the documents to attack Hybe."

When the announcement of the audit broke Monday, shares of Hybe slid 8%, marking its largest fall in seven months. The stock was little changed Thursday.

Hybe holds an 80% stake in ADOR, with Min holding 18% and other executives splitting the remaining 2%.

The development also comes as NewJeans is poised to come back with a new single on May 24.

Hybe said it will continue