Korea’s FTC leaves Coupang founder free of local laws, raising controversy

Kim Bom-suk, the founder and chairman of South Korea’s e-commerce giant Coupang Corp. [Photo provided by Coupang]

The Fair Trade Commission (FTC) didn’t designate Kim Bom-suk, the founder and chairman of South Korea’s e-commerce giant Coupang Corp., as the legal chief of the company in its latest list of business conglomerates under Korean law subject to antitrust scrutiny, because he is a non-Korean national. The decision sparked controversy as it did in 2021 and 2022.

The FTC had tried to amend the country’s antitrust laws to enable the country’s antitrust watchdog to designate foreigners as the legal representatives for their companies. However, the move failed as the U.S. government opposed the plan that would bring American firms under Korean rule amid concerns that holding foreign businesses accountable for any violations of local law could cause trade disputes between Korea and the U.S.

The Korean business insiders said that the designation of foreigners as the legal chiefs of their companies will likely bring risks, rather than benefits, to the economy for several reasons, including higher chances of investment disputes and trade conflicts.

Industry insiders said Coupang Corp. has simple corporate governance, with a low risk of engaging the owner’s family in antitrust activity because Kim has no other private or family-relate company. He is the chief executive officer and board chairman of Coupang Inc., its U.S.-based parent company listed on the New York Stock Exchange, which owns a 100 percent stake in the Korean operation. Coupang owns entire stakes in several Korean subsidiaries.

They also said Coupang Inc. has already been subject to the U.S. Securities and Exchange Commission (SEC), an agency that imposes stricter regulations than those applied by the Korean law, indicating that more regulatory requirements on Coupang could hamper potential investment in the e-commerce giant.

Some said that any regulatory revision that seeks to include non-Korean nationals in the category of business representatives can become a cause of investor-state disputes because the majority of stake in Coupang Inc. is owned by international institutions at 51.6 percent and venture capital firms at 24 percent.

Meanwhile, the FTC identified in its probe into the nationality of the owner’s family that seven spouses and 31 offspring of the founders had dual nationality or were foreign nationals, which led to the controversy.