'Coupang' Becomes a Cross-Shareholding Restricted Company... 'Dunamu' Excluded

Fair Trade Commission Announces 2023 Designation Status of Publicly Disclosed Business Groups

Coupang, which greatly benefited from the spread of COVID-19, surpassed 11 trillion won in assets and was designated as a Mutual Shareholding Restricted Business Group. However, Kim Beom-seok, Chairman of Coupang, avoided being designated as the head of the group this year as well. Dunamu, which was included in the Mutual Shareholding Restricted Business Group last year due to the virtual asset market downturn, was downgraded to a Public Disclosure Business Group. Thanks to the growth of new industries such as electric vehicles, the number of Public Disclosure Business Groups increased by six from the previous year to 82.

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Coupang Surpasses 11 Trillion Won in Assets... Enters 'Mutual Shareholding Restricted Business Group'

According to the '2023 Public Disclosure Business Group Designation Status' announced by the Korea Fair Trade Commission (KFTC) on the 25th, Coupang's total assets increased by 2.474 trillion won from 8.633 trillion won a year ago to 11.107 trillion won, entering the Mutual Shareholding Restricted Business Group. Its ranking in the business world based on total assets also jumped significantly from 53rd last year to 45th. This was due to the substantial benefits gained from the growth of the non-face-to-face market amid the spread of COVID-19. Assets increased significantly due to growth in transaction volume and sales, investments in logistics centers, and the establishment of new subsidiaries. In addition, semiconductor company LGX, which separated from the LG family group, and shipping company Janggeum Shipping were newly included as Mutual Shareholding Restricted Business Groups.

Kim Beom-seok, Chairman of Coupang, avoided being designated as the head of the group again this year due to his U.S. nationality. The KFTC attempted to revise the Enforcement Decree of the Fair Trade Act last year to establish criteria for designating foreigners as heads of business groups, but the revision was not made due to concerns from the Ministry of Trade, Industry and Energy and others that it might violate the Most-Favored-Nation clause of the Free Trade Agreement. Chairman Han Ki-jung of the KFTC stated, “In January, we submitted a revised consultation proposal reflecting the Ministry of Industry’s concerns about trade friction, but their position remains unchanged,” and added, “Coupang opposes designating Chairman Kim as the same person (head), and without separate criteria, designating him as the same person could lead to ISD lawsuits.” Meanwhile, the KFTC’s survey on the nationality status of business group heads, their spouses, and second-generation heads confirmed that the head of OCI is an American.

Impact of "Virtual Asset Market Downturn"... Dunamu Downgraded from 'Mutual Shareholding Restricted Group' to 'Public Disclosure Group' Last Year

The KFTC decided to designate 82 groups with total assets of 5 trillion won or more (3,076 affiliated companies) as large business groups, and 48 groups with total assets of 10 trillion won or more as Mutual Shareholding Restricted Business Groups starting from the 1st of next month. Being designated as a large business group imposes disclosure obligations under the Fair Trade Act and prohibits unfair profit provision to related parties. Mutual Shareholding Restricted Groups are additionally prohibited from mutual shareholding, circular shareholding, and debt guarantees, and are subject to stricter monitoring by the KFTC.

Dunamu, which was designated as a Mutual Shareholding Restricted Group last year due to a sharp increase in business profits and assets fueled by the cryptocurrency boom, was downgraded to a Public Disclosure Group this year. This was due to a decrease in the valuation of financial assets caused by rising interest rates and the contraction of the virtual asset market. Dunamu’s assets decreased by 2.896 trillion won from 10.822 trillion won last year to 7.392 trillion won, and its ranking based on assets dropped from 44th to 61st. Similarly, Kyobo Life Insurance was also downgraded to a Public Disclosure Group due to a decrease in asset valuation caused by rising interest rates.

Impact of New Industry Growth... Number of Public Disclosure Business Groups Rises from 76 to 82

With the growth of new industries such as electric vehicles, the number of Public Disclosure Business Groups increased from 76 last year to 82. Among the eight newly designated groups, Ecopro, Korea HC, Global Sea, and DN saw their total assets increase by more than 2 trillion won compared to the previous year. This reflects the remarkable growth of business groups entering new industries such as secondary batteries (eco-friendly batteries that can be reused) and electric vehicle parts.

There were also changes in the rankings of the top 10 business groups. POSCO rose from 6th to 5th place, while Lotte dropped from 5th to 6th in the asset-based business world rankings. POSCO’s rise was influenced by the physical division in March 2022 into POSCO Holdings (surviving company) and POSCO Co., Ltd. (newly established company), with the stock value of about 30 trillion won of the newly established POSCO Co., Ltd. being added to its assets. There were no changes in the rankings of the top four business groups, with Samsung maintaining 1st place, SK 2nd, Hyundai Motor 3rd, and LG 4th, as in the previous year.

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