Fair Trade Commission Deliberates Designating Coupang Founder Kim Beom-seok as Owner... Decision on 29th

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] The Fair Trade Commission (FTC) is deliberating on designating Kim Beom-seok, Chairman of Coupang's Board of Directors, as the same person (head) of the group. Initially, the FTC Secretariat planned to designate Coupang as a business group without a head, but on the 21st, a plenary meeting composed of the FTC chairman and others was held to reconsider the matter from scratch.

According to the government on the 25th, at a closed plenary meeting regarding the designation of the same person for Coupang attended by seven commissioners, the side advocating for designating Chairman Kim was slightly in the majority. The plenary meeting proceeded with the Secretariat briefly explaining the agenda, followed by five commissioners (excluding the chairman and vice chairman) expressing their opinions and questioning the Secretariat on key issues. The plenary consists of nine members, but two non-standing commissioners were absent.

The FTC Secretariat initially planned to designate Coupang, whose assets exceed 5 trillion won, as a large business group but as a "business group without a head." This judgment was based on the precedent that foreigners are not designated as heads, even though Chairman Kim holds a 76.7% stake in the U.S. corporation Coupang Inc. (applying differential voting rights). Chairman Kim is a U.S. national, and there was also the reason that even if designated as the head, the effectiveness of sanctions would be limited. There is also a precedent where the foreign company S-OIL was designated as a business group without a head.

However, amid controversy, the FTC has begun a full reconsideration. The main background is that the Fair Trade Act does not specify nationality criteria for the same person, and the legal principle is to designate the person who effectively controls the business group as the same person. It is also considered that S-OIL differs in that its parent company's major shareholder is the Saudi Arabian royal family, and unlike Chairman Kim, no single individual holds management rights.

With opinions evenly divided, only Chairman Cho Sung-wook's decision remains ahead of the announcement of the head designation results on the 29th.

However, even if Chairman Kim is designated as the head, the issue of "regulatory effectiveness" remains. Chairman Kim's relatives, the U.S. company Coupang Inc., and its executives are all classified as "persons related to the same person," and companies where the head and related persons hold more than 30% of shares and are the largest investors become targets of the FTC's large business group sanction policies.

Foreign nationals serving as executives and foreign corporations established for overseas business may also be subject to sanctions, raising concerns that even if sanctions are imposed, their effectiveness may be low. Coupang Inc., listed on the New York Stock Exchange, is already subject to strict regulations under the U.S. Securities and Exchange Commission rules, leading to concerns about double sanctions.

Given these concerns, there remains a possibility that Coupang will be designated as a business group without a head according to the FTC's original plan. Even if Chairman Kim is not designated as the head, there would be no significant regulatory gap as the prohibition on unfair support acts under Article 23, Paragraph 1, Subparagraph 7 of the Fair Trade Act can still be applied.

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