Coupang CEO Bom Suk Kim Designated Controlling Shareholder, Subjecting Firm to New Regulations

The Fair Trade Commission's decision to designate Bom Suk Kim, CEO of Coupang Inc., as the controlling shareholder of the Coupang conglomerate marks a significant shift after five years. Previously, the company itself was designated as the controlling entity due to ambiguities in regulations concerning foreign controlling shareholders. This change was primarily driven by concrete evidence of Kim Yu-seok, Bom Suk Kim's brother, actively participating in the management of Coupang Korea and receiving substantial compensation, including over 10.3 billion won in total remuneration from 2021 to 2024.

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The important thing is not the formal aspects of rank or compensation, but whether they are practically involved in company management, similar to registered executives.

While Kim Yu-seok's role as head of logistics at Coupang Korea was known, the Fair Trade Commission initially lacked confirmation of his management involvement. However, a major information leak incident at Coupang last year led to a hearing where his vice-presidential level status was revealed. Further investigation by the commission, spurred by the incident and subsequent reports, uncovered additional data confirming his significant influence in key decision-making processes, including hundreds of meetings related to logistics and delivery policies. This practical involvement, rather than formal title or compensation, was the deciding factor.

The designation of Bom Suk Kim as the controlling shareholder legally solidifies his position as the de facto controller of the Coupang Group. This brings new obligations and regulations, including the requirement for Coupang to disclose information about its foreign affiliated companies owned by Kim and his relatives (within the fourth degree of kinship and third degree of affinity) if they hold over 20% of the shares. Furthermore, Coupang will be subject to regulations prohibiting self-dealing, meaning any transactions that unfairly benefit Kim or his relatives' affiliated companies will face sanctions.

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In some cases, we confirmed that Kim Yu-seok held a higher rank than the CEO, depending on the affiliated company.

This decision by the Fair Trade Commission, reversing its previous stance on the management involvement of Kim's relatives in Korea, also raises questions about whether Bom Suk Kim submitted false information in the past. The commission is currently reviewing related documents to determine if there were any false submissions. The Economic Justice Citizens Coalition lauded the decision, stating it enables minimal control over potential self-dealing within Coupang, strengthens oversight of internal transactions by including affiliated companies of Kim's relatives, and allows for more effective regulation of platform conglomerates' abuse of market dominance.

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This decision makes minimal control possible over self-dealing that could occur at Coupang, and by including the affiliated companies of (Bom Suk) Kim's relatives in the scope of affiliates, surveillance of internal transactions is strengthened, and more effective regulation of platform conglomerates' abuse of market dominance becomes possible.