Last month, Herbert - who helped form the Spice Girls and is said to be a friend of Simon Cowell - was reportedly sacked from a consulting role he held on the show after judge Tulisa launched legal action against him.
The N-Dubz singer is said to believe that he plotted to make up to £4million by selling the embarrassing clip, which was leaked by her former boyfriend and one of Herbert's protégés Justin Edwards.
Now The Sun has revealed that the 41-year-old is the mastermind behind JukeBoxx, a 'stand-out' four-piece boyband who wowed both the panel and the audience at recent Manchester auditions with an original song.
An insider told the paper: "The news JukeBoxx are managed by Chris will mortify Tulisa who is furious with him."
Meanwhile, a 'source close to Tulisa' added: "It is fair to say there is no love lost between Tulisa and Chris. She won’t be happy at the news he still has involvement with the show.
"But she is a pro and won’t allow this news to cloud her judgement."
An X Factor spokesperson said that JukeBoxx will be able to stay in the contest with Herbert as their manager.
The talent contest - set to return to our screens next month - is allowing acts with representation to take part for the first time this year, in a move thought to be prompted by the success of The Voice.