The Korea Fair Trade Commission said on the 29th that it designated Coupang founder Kim Beom-suk, chair of the board at CoupangInc (U.S. headquarters), as the company's same person (head of the group). Same person refers to the head of a large business group. Because the "same person" in effect controls the business operations of multiple companies, the Fair Trade Act uses the term "same person." Under U.S. law, with a focus on "de facto control," the term used is "controlling person."
The Korea Fair Trade Commission (FTC) designated Coupang as a large corporations group (subject to public disclosure) with asset of at least 5 trillion won in 2021 and had treated the Coupang corporation, not the individual Kim Beom-suk, as the same person, but changed that after five years.
Starting this year, the chair must report annually to the Korea Fair Trade Commission (FTC) and also disclose publicly the shareholdings in domestic and overseas affiliates held by the chair, the spouse, relatives within the fourth degree, and in-laws within the third degree. Failure to properly fulfill these obligations can lead to a criminal complaint for violating the Fair Trade Act.
◈ must disclose the status of domestic and overseas affiliates in which Kim Beom-suk holds equity
The Korea Fair Trade Commission (FTC) said it will designate the chair as Coupang's same person effective on the 1st of next month. Each year, the FTC designates corporations with asset of at least 5 trillion won as a "business group subject to public disclosure," and designates the person who effectively controls that company as the "same person," placing them under focused oversight.
Business groups subject to public disclosure must report to the Korea Fair Trade Commission (FTC) each year on management conditions of domestic and overseas affiliates and the status of internal transaction. The same person must submit the status of shareholdings of themselves and their family. If any of these materials are found to be partially omitted or falsely reported or disclosed, they can be referred to prosecutors for violating the Fair Trade Act.
The Korea Fair Trade Commission (FTC) said, "The reason we newly designated the chair as the head of the group is that it was revealed that the younger brother, Kim Yu-seok, is participating in Coupang's management." The Fair Trade Act allows a person to be deemed the same person even if not the largest shareholder or top position holder, if a relative participates in management. The fact that Vice President Kim worked at Coupang in logistics was revealed after last year's Coupang personal information leak incident. Vice President Kim is said to have received about 14 billion won in pay and bonuses at Coupang from 2021 to 2024.
The Korea Fair Trade Commission (FTC) said, "Kim Yu-seok holds the vice president rank at Coupang, which corresponds to the top tier within Coupang's internal grading, similar to the rank of a representative director at a key affiliate." It added, "Kim receives annual compensation equivalent to the average for registered executives and has been assigned a secretary." It continued, "Kim hosted hundreds of regular and ad hoc meetings related to logistics and delivery policy and also invited the head of Coupang Logistics Service, a Coupang logistics affiliate, to review weekly performance."
Earlier, during the 2024 process of designating business groups subject to public disclosure, Coupang submitted to the Korea Fair Trade Commission (FTC) a confirmation letter stating that "Chair Kim Beom-suk's relatives are not serving as executives at domestic affiliates and are not participating in management." Regarding this, an FTC official said at a briefing that day, "We will examine whether to impose sanctions for submitting false designation materials."
◈ Coupang to file an administrative suit... possibility of an international dispute
Coupang said, "We will faithfully explain through an administrative lawsuit going forward." There have been no known cases of lawsuits filed over the FTC's same person designation. In a statement the same day, Coupang said, "Kim Yu-seok has no equity in domestic affiliates and does not fall under an executive under the Fair Trade Act, and is merely a member of CoupangInc in charge of improving global logistics efficiency."
It also said, "Founder Kim Beom-suk meets all four exception criteria for designation as the same person under the Fair Trade Act." The exception criteria include that even if the Coupang corporation is designated as the same person, the scope of domestic affiliates remains the same, and that the chair and relatives must not make equity investments, extend funds, or provide debt guarantees to domestic affiliates, among others.
There is also talk that Coupang's U.S. investors may file an international investment dispute. After the coupang personal information leak incident, as our government formed a pan-government task force (TF) and launched a full-scale probe, existing U.S. investors in Coupang, Greenoaks and Altimeter, filed an investor-state dispute settlement (ISDS) case against the Korean government.
Meanwhile, there is analysis that if Vice President Kim Yu-seok resigns, the grounds for designating the same person could be resolved. Regarding this, an official at the Korea Fair Trade Commission (FTC) said, "If the condition that Mr. Kim is not participating in management is met, the (Coupang) corporation can be designated (as the same person)," adding, "It is difficult at this stage to say whether that will happen."