Singer Park Hyo Shin recently won the first trial of the legal dispute between him and his former label Glove Entertainment.
Park had filed the lawsuit not in the capacity of an artist but as a shareholder of the company. He is the second-largest shareholder at the label, with a 39.37% stake. He is followed by an unidentified third-largest shareholder, “A,” who holds a 10.76% stake in the company.
In February 2022, Glove Entertainment held a general meeting of shareholders and informed them that the company will be issuing additional shares worth ₩100 million KRW (about $81,100 USD) to a third party. The reason stated was that the operation scales of the business had grown, but the capital at hand was not sufficient to support it.
Issuing such a large amount of additional shares to a third-party meant that the stakes of Park and “A” would have gone down significantly in the company, thus reducing the value of their shares. But the two shareholders jointly filed a lawsuit, claiming that Glove Entertainment’s decision was illegal. According to their claims, the former CEO of the company, “B,” who is the largest shareholder, has assigned new shares to his accomplices. His motive is to maintain his management rights in the company while lowering the stakes of Park and “A.”
The plaintiffs also mentioned that shareholders were not informed in a timely manner about the decision to issue a paid-in capital increase, which adds to the illegality of the move.
On January 26, the 31st division of the Seoul Central District Court Civil Settlement gave its ruling in favor of Park and “A” and ordered the issuance of the new shares to be invalidated.
The relationship between Park and his previous agency was already strained. He even got candid with fans about not getting paid for his music-related work and contract with Glove Entertainment. The singer stopped promoting in 2019, and it wasn’t until May 2022 that he restarted his activities after setting up his own agency.
You can read about the singer’s long-standing friendship with BTS‘s V here: