Are there any experts in corporate law here?

    I keep seeing folks on here asserting that sublabels, subsidiaries, and labels that have been acquired by other labels/companies have some sort of carte blanche power to do whatever they want, as if their parent companies or new owners have no control over them.


    For example, i see folks claiming that Bighit or Source or Pledis can do whatever they want, and that BangPD and Hybe have no control over them. Same with Starshit and High Up under Kakao, folks claiming that they should be considered independent even though Kakao acquired them.


    To me, this is, on its surface, utterly asinine. What brain dead CEO running Kakao, Hybe or CJ would risk MILLIONS or even BILLIONS to acquire another company and GIVE UP ALL POWER to the company they just acquired???? This makes no sense on any level. What happens if Source or Bighit starts fucking up, losing money hand over fist or gets involved in a huge scandal. Does that mean Hybe has no power to start cleaning house and firing everyone at Source or Bighit?


    But hey, this is just me, a layperson talking. Can anyone clear up this mess and explain once and for all what happens with corporate acquisitions that take place? :pepe-notes::pepe-notes:

    Quote from BlackpinkHouse

    carte blanche power to do whatever they want

    as long as it is still profitable.



    that being said, the parent company could vote in directors for the board to help make decisions but it is very disjointed and much more a loose grip on the reigns. Subsidiaries are often in charge of raising and spending their own money and can't really chart a direct line of command to the parent company.


    --this is what I know, please take with at least a handful of salt on the way out the door I dunno much about corporate law really.

    It's up to the parent company how much control they want to exert on a subsidiary. They don't exert direct control, but, as a majority shareholder, they can elect and fire the board of directors on the fly, so they must answer to them.

  • Moderator

    Moved the thread from forum K-POP to forum The Lounge.

    sorry mate but I only have a masters in music and a PHD in kpop history as well as being a vocal trainer, choreographer and underground rapper - isn't that the basic min for joining AKP?

    didn't have that time to complete a law degree...

    Imagine HYBE & BTS' relationship or any other big western artists to major labels. Basically, they have a say in their creative direction, as long as they are still bringing all the profits to their parent company.


    HYBE and other big corporations are buying these smaller companies to expand their business and to make more money. If it's not making them profits, then HYBE would step up and make some changes. Same as what happened to Source Music. Hybe stepped up and change the music of Gfriend, because they think it would sell, and hopefully save the group & their investments from tanking even more (since they are already on decline)- but nothing happened. This caused SourceM to let go of Gfriend. It's sad for fans, of course. But I saw the financial report of HYBE, and it's true that they loss a lot of money investing in the group.


    Overall, it really depends on the parent company what to do with it. There are companies like HYBE who let their subsidiaries to remain the same, and would only step up if it's losing them money. Basically, HYBE is like a bank. But there are companies as well that would literally change the dynamics of their subsidiaries, and shake things up.

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