Hybe joins regulated conglomerate list

[Photo by Yonhap]

The chairmen of South Korean conglomerates Coupang Inc. and Dunamu Inc. avoided being designated as the persons holding de facto control over their businesses, while Hybe Co. was designated as a conglomerate to become the first entertainment company that is subject to conglomerate regulations.

The Korea Fair Trade Commission (KFTC) announced the 2024 list of conglomerates subject to regulatory filings and public disclosure requirements on Wednesday.

According to the updates, the number of conglomerates with total assets of 5 trillion won ($3.7 billion) or more rose to 88, an increase of six from 2023. The number of affiliated companies increased by 242 to hit 3,318. The number of mutual investment restriction conglomerates, with assets of 10.4 trillion won or more, was the same as 2023 at 48, but the number of affiliated companies increased by 44 to total 2,213.

A new enforcement decree was applied to the chairmen of Coupang and Dunamu in particular, designating the companies themselves, rather than their chairmen, as the de facto control holders of their conglomerates. Although the KFTC primarily designated natural persons as de facto control holders, it determined that both conglomerates met the conditions under the recently revised decree that allows legal entities to be designated as de facto control holders. Although the KFTC claims that the designations do not create a regulatory gap, its decision could be criticized, particularly given the controversy surrounding the designation of Coupang Chairman Kim Beom-seok. Also known as Bom Kim, his foreign citizenship was cited as a reason against his designation as a de facto control holder.