Coupang Challenges Designation of American CEO Kim Bumseok as Group Owner with Administrative Lawsuit...Will the U.S. Stay Silent? [Why&Next]

The Korea Fair Trade Commission (KFTC) has changed the designated "same person" (de facto group owner) of Coupang from the corporation to the individual, Beomseok Kim, for the first time in five years. Coupang, however, continues to dispute the KFTC’s criteria, suggesting that the issue will ultimately be decided through legal interpretation. A key point of legal contention is whether Beomseok Kim, founder and Chairman of Coupang Inc., has a younger brother who is actively involved in Coupang’s management. As Kim, a U.S. citizen, is now directly subject to regulation, this decision also has the potential to impact future Korea-U.S. relations.

Beomseok Kim, Chairman of Coupang Inc. Photo by Coupang

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On the 29th, the KFTC announced the results of the designation of publicly disclosed business groups (large conglomerates) for 2026, stating that Coupang’s "same person," which had previously been the Coupang corporation, will now be changed to the natural person, Beomseok Kim. It is the first time in five years since Coupang was designated as a business group subject to disclosure requirements, with total assets of over 5 trillion won, in 2021, that the group owner has been changed from a corporation to an individual. Notably, this is the first time in 40 years since large business group regulation began in 1986 that the CEO of a U.S.-listed company who is a U.S. national has been designated as the group owner. Previously, Woo Hyun Lee, Chairman of OCI and a U.S. national, was designated as the group owner in 2023, but that company was not listed in the U.S.

The KFTC determined that Beomseok Kim’s younger brother, Yuseok Kim, is employed at a high executive level within the company and is in effect participating in management, thus failing to meet the exception requirements. This led the KFTC to designate the group owner as an individual rather than a corporation. Under the current Fair Trade Act, for a corporation to be designated as the "same person" instead of an individual, the following conditions must be met: ▲ The scope of the business group must be the same regardless of whether the individual or corporation is designated as the group owner; ▲ The individual in question must not hold direct equity stakes in domestic affiliates, other than the top holding company; ▲ Relatives must not have equity stakes in or serve as executives of domestic affiliates, nor participate in management; ▲ There must be no financial transactions or debt guarantees between the individual (or their relatives) and domestic affiliates. These criteria are based on the revised Fair Trade Act and the "Guidelines on Criteria and Procedures for Determining the Same Person," which the KFTC amended in 2023 and implemented the following year.

During a briefing, the KFTC explained, "Mr. Yuseok Kim holds an executive vice president position, equivalent to the highest ranks within Coupang, similar to the CEO grade of major affiliates. His annual compensation is on par with the average registered executive at the same level, and he is assigned a secretary, receiving treatment similar to a registered director." The KFTC added, "He has chaired hundreds of regular and ad-hoc meetings related to logistics and delivery policy, invited the CEO of Coupang Logistics Services (CLS) and others to review weekly business performance, and discussed improvement plans such as volume expansion and changes to delivery policy."

The KFTC further noted that they confirmed other factual circumstances indicating that Yuseok Kim exercises significant influence over the execution of key business operations. This was reportedly identified through materials obtained during the National Assembly hearings following Coupang’s large-scale personal data breach last year and from on-site investigations at Coupang headquarters earlier this year.

Choi, Director of the Corporate Group Monitoring Bureau at the KFTC, stated, "A report on Yuseok Kim’s involvement in management was filed during the Coupang hearings, and during our verification process, we discovered additional matters that were previously unknown." He added, "When compared to the ranks that could participate in major decision-making at Coupang, we confirmed during the on-site investigation that Yuseok Kim is of virtually the highest rank."

Chief Director Choi of the Corporate Group Surveillance Bureau at the Fair Trade Commission is briefing on the designation results of business groups subject to public disclosure for 2026 at the Government Complex Sejong in Sejong City on the 29th. Photo by Yonhap News

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Following the KFTC announcement, Coupang promptly issued a statement: "Coupang Inc. owns 100% of the Korean Coupang corporation, and the Korean entity in turn owns 100% of its subsidiaries and sub-subsidiaries, resulting in a transparent governance structure. Chairman Kim and his relatives do not hold any shares in the Korean affiliates, eliminating any risk of private benefit. We will sincerely explain our position through future administrative litigation."

Coupang clarified, "Chairman Kim’s younger brother is not an officer (CEO, director, auditor, manager, etc.) under the Fair Trade Act and does not own any shares in the Korean affiliates." The company also emphasized, "As a U.S.-listed company, Coupang Inc. is subject to strict oversight, complying with related-party disclosure obligations required by the Securities and Exchange Commission (SEC). The Korean Coupang corporation has consistently met the exception criteria for group owner designation."

Previously, Coupang also rebutted calls from civil society groups on the 23rd to designate Chairman Kim as the group owner, stating that "the company meets all four exception criteria used by the government to determine the group owner." Specifically, "Chairman Kim’s brother has been seconded from Coupang Inc. to handle global logistics efficiency work and, like other employees of similar rank, merely holds a portion of Coupang Inc. listed shares."

The company further argued that Coupang’s governance structure is such that the Korean corporation wholly owns its subsidiaries and sub-subsidiaries, and neither Chairman Kim nor any of his relatives hold shares in Korean affiliates. Coupang also claimed that designating Chairman Kim as the group owner constitutes double regulation of a U.S.-listed company headquartered in the U.S. "If Chairman Kim is designated as the group owner, U.S. corporate board members who are CEOs of major U.S. companies and serve on the Coupang Inc. board would also be classified as 'related parties of the group owner.' This would create an absurd situation in which companies in which they hold shares or exercise control would be considered Coupang affiliates."

Coupang also highlighted the case of S-Oil, where the group owner is designated as a corporation rather than an individual, arguing that Coupang’s designation as an individual is a discriminatory measure that lacks fairness compared to other foreign companies, though this was not reflected in the final result. In accordance with relevant regulations, Coupang will file an objection with the KFTC within seven days, and if it is not accepted, plans to proceed with administrative litigation.

Members of the Democratic Party of Korea, the Party for Justice and Innovation, the Progressive Party, and the Social Democratic Party held a press conference on the 28th at the National Assembly Communication Center condemning the unfair pressure from the U.S. political sphere that infringes on South Korea's judicial sovereignty in relation to the Coupang incident. Photo by Yonhap News Agency

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If the group owner is ultimately changed from a corporation to an individual, Coupang will be required to conduct even more transparent management. The Fair Trade Act mandates that if the group owner and their relatives (related parties) hold 20% or more of the total issued shares of an overseas affiliate, the company must publicly disclose, once a year, information such as the affiliate’s name, representative, country of incorporation, business activities, shareholder status, and any circular shareholding. The law also prohibits providing unfair private benefits to related parties.

In addition, with issues surrounding Coupang-such as the personal data breach, allegations of unfair transactions with suppliers, industrial accidents, corporate governance concerns, and suspicions of tax evasion-calls are expected to grow for Chairman Kim to more faithfully fulfill his social responsibilities.

However, given that the U.S. government has criticized the Korean government’s investigation into Coupang’s personal data breach as discriminatory against U.S. companies, the impact of this group owner designation on bilateral relations remains to be seen. On the 21st, 54 Republican members of the U.S. House of Representatives sent a letter to Ambassador Kang Kyungwha, urging an end to discrimination against U.S. firms like Coupang.

In response, a KFTC official stated, "Changing the group owner designation is a legitimate enforcement of the law in accordance with the requirements and guidelines specified in the enforcement decree, so we do not expect the U.S. to raise this as an issue." The official added, "The so-called double regulation that Coupang claims is not a problem, as the U.S. disclosure requirements are for investor protection, while domestic regulations aim to curb concentration of economic power. Only matters such as general company status and financial information overlap, so the actual burden on Coupang should not be significant."

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