Chart-topping K-pop group NewJeans announced Thursday their decision to leave their label ADOR, accusing the company of "mistreatment".
The news comes two weeks after the girl group sent an ultimatum to ADOR's parent company HYBE -- behind K-pop sensation BTS -- telling the firm they would terminate their contract unless a set of demands was met.
"From midnight today, our contract will be terminated with ADOR," member Minji said at a press conference.
NewJeans made their debut in 2022 and the K-pop phenomenon is among HYBE's most successful groups.
Band member Hanni said Thursday the group has "faced mistreatment, not just towards us but also including our staff", without elaborating.
NewJeans experienced "deliberate miscommunications and manipulation regarding multiple areas", she said.
"This is not the type of work ethic we respect and not one we want to be a part of, and to continue working under a company with no intention of protecting NewJeans would only do us harm," said Hanni.
In a statement to AFP, ADOR said they "regret" that the press conference "was planned and conducted without sufficient review."
ADOR added that the exclusive agreement between ADOR and the NewJeans members "remains in full effect" and therefore, they "respectfully request that the group continue its collaboration with ADOR on upcoming activities, as has been the practice to date".
The band members said they would continue with their contractual obligations, but acknowledged they may no longer be able to use the name NewJeans.
"However, that doesn't mean that we are giving up on the name at all," said Danielle.
"We will continue to fight for NewJeans. NewJeans never die."
The group's demands addressed to HYBE included an apology for a comment by one of the company's managers, who is accused by NewJeans of bullying, and the immediate reinstatement of their producer Min Hee-jin.
Min resigned last week from ADOR's board of directors after HYBE accused her of breach of trust, which sparked a sprawling legal and public relations battle.
Industry experts said the decision by NewJeans was expected.
"The contract termination lawsuit itself has been widely anticipated in the market, so today's press conference, in a way, seems to have a predetermined outcome," said Lim Soo-jin, an analyst at Daishin Securities.
"Entertainment analysts have generally excluded NewJeans-related projections from next year's estimates, so the overall impact is not expected to be substantial," he told AFP.
The hefty fee which NewJeans may have to pay will compensate for "financial loss" at the label, he added.
The K-pop group may have to face a contractual penalty of up to 620 billion won ($440 million) according to legal experts.
The band members, however, disagree.
"We have not breached the exclusive contract and have done our best in our activities so far, so we believe there is no reason for us to pay any penalty," said band member Haerin.
"On the contrary, it is ADOR and HYBE that violated the contract, leading to this situation, and the responsibility clearly lies with them."
ADOR responded that the agency "as the contractual party, has not violated the terms of the agreement".
"Despite multiple requests for meetings with the artists, our efforts have not been successful. We hope the members will now be willing to engage in an open and candid discussion," said ADOR.
