Ruling expected by July 15 in dispute over Bom Kim's regulatory status
Bom Kim, founder of Coupang, walks from lunch during the Allen & Company Sun Valley Conference in Sun Valley, Idaho, in 2022. (Getty Images)
A Seoul court has demanded that the Fair Trade Commission clarify the reason behind its decision to designate Coupang founder Bom Kim as the firm’s controlling figure, or “same person.”
The Seoul High Court questioned the basis of the FTC’s changed stance on Kim after its on-site inspection of Coupang during a hearing on Tuesday, asking the FTC to provide clear grounds on how the antitrust regulators confirmed that Kim’s younger brother, Kim Yoo-seok, a Coupang vice president, took part in Coupang’s business management.
The FTC argued that Kim Yoo-seok’s executive role, participation in decision-making processes, and influence over business tasks led it to believe that he had been engaging in Coupang’s business management.
The FTC added that the designation is left to its discretion, so the decision should be respected.
Coupang, on the other hand, underscored that it is a foreign conglomerate that has a different structure from Korea’s large enterprises, noting that the FTC is imposing unnecessary obligations on the US-listed company.
Coupang also said that the designation could result in insurmountable damages, as it may lead to the disclosure of information beyond the US Securities and Exchange Commission’s regulatory filing standards and prompt investors to file a class-action lawsuit.
The FTC dismissed Coupang's claim of being a foreign firm and said that a company conducting business overseas must follow local regulations.
Coupang filed a lawsuit to overturn the FTC’s decision last month, claiming the FTC had suddenly changed its stance without a specific cause. The FTC's designations came after it investigated Coupang's data breach incident of some 33 million users, mostly Korean, last year.
In Korean legal terms, a “same person,” which is used to pinpoint the de facto leader of a large business group, becomes subject to tighter regulatory watch. Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won are designated as the “same person” of their respective conglomerates.
If the court sides with the FTC, the Coupang founder will be required to report his stock ownership status as well as that of any relatives working for Coupang and its affiliates — both in and out of Korea — to the FTC every year. The court plans to make a ruling before July 15 when the temporary suspension in Coupang’s administrative suit to cancel the antitrust regulator’s designation.
hwkan@heraldcorp.com
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