Can the crime of ‘business breach of trust’ be applied to Min Hee-jin?

The key is whether actual action has been taken.
Whether or not the contract was leaked will also likely be an issue.

As the conflict between the agency Hive and its subsidiary Adore CEO Min Hee-jin led to a police complaint, attention is focused on whether Hive's allegations of CEO Min's breach of trust will be proven. The legal community believes that it is not easy to acknowledge Representative Min's charges of breach of trust in terms of the content and target of the breach of trust based solely on the circumstances that have been disclosed to date. However, since both sides can file additional charges, there is room for the investigation to expand to other charges.

Listening to the opinions of lawyers and legal scholars on the 28th, in order for CEO Min to be charged with breach of trust, the key question is whether there was an ‘actual act’ and, if so, whether this act caused damage to ‘Adore’, where Min Hee-jin serves as CEO, and not to Hive, the largest shareholder.

Professional breach of trust is not punishable at the preliminary or conspiracy stage. ‘Initiation or commencement of implementation’ is necessary. In a phone call with the Hankyoreh on this day, lawyer Park Hoon said, “In order to establish a charge of breach of trust, there must be evidence that CEO Min initiated specific actions, such as ‘writing a contract to take New Genes’, rather than saying, ‘I will take New Genes.’” He also added, “It is difficult to punish the issue of the takeover of management rights based solely on what was said in a messenger.”

A breach of trust in business occurs when management causes damage to the company, not when damage is caused to shareholders. Therefore, in this case, even if there was ‘initiation or commencement of execution’, the victim of CEO Min’s breach of trust in business is only ‘Corporation Adore’ and cannot be ‘largest shareholder Hive’, which holds 80% of Adore’s shares. The most famous precedent in this regard is the Supreme Court ruling in the case of the issuance of Everland convertible bonds at a low price in connection with the succession of management rights to Samsung Electronics Chairman Lee Jae-yong in 2009. At the time, the Supreme Court acquitted former Samsung Group Chairman Lee Kun-hee and others on charges of breach of trust under the logic that even if convertible bonds were issued at a low price, this was only a ‘loss to shareholders’ and not a ‘loss to the company.’

However, if CEO Min’s ‘contract leak’, which Hive is taking issue with, is true and this ultimately caused damage to Adore, the possibility of various criminal punishments, including breach of duty, is open. On the 26th, Hive refuted CEO Min’s press conference held the day before, claiming, “We conducted (the audit) after confirming that documents that were confidential to management were leaked.”

Attorney Taejeong Yang (Gwangya Law Firm) said, “If (Hive’s) story that Adore’s vice-president leaked Hive’s internal financial data and artist contract data and planned a strategy is correct, it constitutes a leak of trade secrets under the Unfair Competition Prevention Act. It can also be seen as damaging the stock price or image of Adore (not Hive, the shareholder).” Attorney Jeong Jin-kwon (Soul Law Firm) said, “If you showed personnel information to a third party, such as a shaman, you could also be accused of violating the Personal Information Protection Act.”

There are many predictions that the dispute between Hive and CEO Min will escalate into a civil lawsuit in the future. Attorney Jeong Jin-kwon said, “In a situation where Hive, the majority shareholder, has requested to convene a general shareholders’ meeting to dismiss Representative Min, Representative Min may file a lawsuit confirming the invalidity of the general shareholders’ resolution or a provisional injunction to confirm director status in order to maintain his position.” Attorney Ji Min-hee (Daeryun Law Firm) said, “There is a possibility that (Hive) may file a claim for damages due to infringement of trade secrets, etc.” Regarding the accusation from Hive's CEO Min, an official at the Yongsan Police Station stated, "We will review the complaint and then look into the charges."

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