The FTC again exempts Coupang Chairman from being designated as its controlling party[Editorial]

Kim Beom-seok, Chairman of the Board of Directors of Coupang, poses in front of the New York Stock Exchange (NYSE) in New York, United States. Courtesy of Coupang

Coupang Chairman Kim Beom-seok has once again avoided being designated as the company’s “controlling party” by the Fair Trade Commission (FTC). If designated as the head of the company, the person will be obliged to be prohibited from earning private interests and submit data related to family members and relatives, but Kim is not subject to the regulations while effectively controlling Coupang. In other words, the FTC has turned a blind eye to the trick to dodge social responsibility behind the corporation.

In the “2024 Group of Companies Subject to Disclosure” released on May 15, the FTC designated Coupang Co., Ltd., a business holding company, not Chairman Kim, as the same person for Coupang. The controversy over Chairman Kim's designation of the head of the company began in 2021. Although the company was included in the conglomerate group with assets of more than 5 trillion won, it designated the corporation as the head of the company instead of a natural person because it has U.S. nationality. As the controversy continued year after year, the FTC revised this year's enforcement ordinance to create four exceptions that allow the designation of the same person as a corporation. Coupang believes that all of these apply, which are the regulations include that the natural person (Kim Beom-seok), who controls Coupang, does not invest in domestic affiliates except for the uppermost company (Coupang Inc), and that the owner's family does not participate in management, such as serving as executives.

However, controversy arose over Kim's younger brother and his wife working at Coupang's Korean subsidiary. The two are serving as the head of global logistics efficiency improvement department and personnel management computer system operation department, respectively, and are known to earn about 500 million won a year. Kim also owns the shares of Coupang Inc. If they are relatives of the owner, they can participate in decision-making on behalf of the CEO as much as possible even if they are not executives. They can also report corporate situations to the owner and play the role of his or her eyes and ears.

Coupang ranked 27th this year from 45th last year in terms of assets. However, as the size of the company grows, it is criticized for its unethical and anti-labor corporate culture that neglects workers' hard work. Since 2020, workers at Coupang’s logistics centers and those in charge of its delivery service have died due to overwork. Strikes were held demanding improvement of poor working conditions, and also suspicions have raised that the company has created a blacklist to prevent reemployment of people who it does not want to hire.

Kim's control over Coupang is also recognized by the FTC. It is a clear preferential treatment for the head of such a company to be exempt from various punishments in the blind spot of regulations because he is not a Korean national. There is also a problem of reverse discrimination against Korean entrepreneurs. The FTC should take strict action to ensure that Kim fulfills the obligations of his public and private roles.

※This article has undergone review by a professional translator after being translated by an AI translation tool.