Controversy Over Coupang's Designation as a Large Business Group Without a Chief... Fair Trade Commission "No Decision Yet"

[Image source=Yonhap News]

[Asia Economy Reporter Joo Sang-don] Coupang is set to be designated as a large business group, but controversy over fairness is arising as it is reported that Kim Beom-seok, the chairman of the board, will not be designated as the head of the group (same person) due to his U.S. nationality.

According to the distribution industry on the 6th, the Fair Trade Commission (FTC) will designate Coupang as a publicly disclosed business group starting next month on the 1st.

The FTC designates groups with assets exceeding 5 trillion won as publicly disclosed business groups. Companies with assets over 5 trillion won are required to disclose regulations on private interests of the head of the group, large-scale internal transactions, and the status of major shareholders' stock holdings and changes.

Coupang's total assets as of the end of 2019 were 3.0616 trillion won. However, according to the report submitted to the U.S. Securities and Exchange Commission (SEC) by Coupang LLC (currently Coupang INC), the parent company of the Korean corporation Coupang, Coupang LLC's total assets as of 2020 were 5.06733 billion dollars (5.7 trillion won).

When designated as a large business group, the FTC designates the same person. Coupang's founder, Chairman Kim, holds 10.2% of Coupang's shares. If differential voting rights are applied, he holds 76.7% of the voting rights. This means Chairman Kim can be seen as the actual owner. However, since Chairman Kim is a foreigner with U.S. nationality, the FTC is reportedly planning to designate the corporation, not Chairman Kim, as the same person. Although there is no regulation regarding the nationality of the same person under the Fair Trade Act, the FTC has no precedent of designating a foreigner as the head of a group.

If Chairman Kim avoids designation as the same person due to being a foreigner, fairness controversies with recently designated large business groups such as Naver and Kakao are inevitable. Previously, Naver requested that the same person be designated as 'Naver,' but the FTC designated Lee Hae-jin, Naver's Global Investment Officer (GIO), as the same person ex officio.

The FTC stated in a press release on the day, "No decision has been made yet regarding the designation of Coupang as a publicly disclosed business group and who the same person is."

This content was produced with the assistance of AI translation services.