A court has put the brakes on the Korea Fair Trade Commission's action designating Bom Kim, chair of Coupang Inc., as the same person of Coupang. The same person refers to an individual or a corporation that actually controls a large business group. The Korea Fair Trade Commission (FTC) changed Coupang's same person from the existing corporation to Kim as an individual, but the effect of the action has been halted until a ruling is reached in the main lawsuit.
The Administrative Division 7 of the Seoul High Court on the 14th partially granted Coupang's request to suspend the effect of the Korea Fair Trade Commission (FTC)'s action to change the designation of the same person. A suspension of effect is a procedure that temporarily halts the effect of an administrative action until the main trial disputing the lawfulness of the action is concluded.
The court said it would suspend the effect of the action in which the Korea Fair Trade Commission (FTC) on May 1 changed Coupang's same person to Kim, from the date the judgment in the main lawsuit is pronounced until the 30th day. The effect of the action in which the Korea Fair Trade Commission (FTC) on Apr. 8 demanded that Coupang submit materials related to Kim is also suspended for the same period.
The court saw that leaving the action in place could cause irreparable harm to Coupang. The court said, "There is an urgent need to prevent irreparable harm that may occur to the applicant due to the effect of the action," and added, "Even if the effect is suspended, it is hard to see that there is a concern of a significant impact on the public interest."
The Korea Fair Trade Commission (FTC) on Apr. 29 decided to change Coupang's same person from the Coupang corporation to Kim. Until now, the corporation had been designated as the same person on grounds including that Kim is a foreign national and did not directly hold equity in domestic affiliates.
Behind the commission's change in judgment is Kim's younger brother, Kim Yu-seok. The Korea Fair Trade Commission (FTC) saw that Kim is substantially involved in Coupang's management. For this reason, it determined that Coupang no longer meets the exceptional conditions allowing a corporation, rather than a natural person, to be designated as the same person.
Coupang filed an administrative suit in objection. Coupang argues that Kim and his relatives do not hold any equity in domestic affiliates, so there is no concern about private interest appropriation or funneling of work. Private interest appropriation refers to acts in which a controlling family gains undue benefits through transactions among affiliates.
This decision is not a final determination on whether Kim can be deemed Coupang's same person. In the main lawsuit, the court will examine whether the Korea Fair Trade Commission (FTC)'s grounds and procedures for changing the same person were lawful. However, until the main judgment, the effects of both the action changing the same person designation and the action requesting submission of materials related to Kim are suspended.