Court suspends FTC's designation of Coupang founder Kim Beom-seok as 'total owner'

A South Korean court has temporarily halted the Fair Trade Commission's (FTC) move to designate Coupang founder Kim Beom-seok as the "total owner" of the e-commerce giant. The Seoul High Court's administrative division granted Coupang's request for an injunction, suspending the FTC's decision to change the conglomerate's representative owner from its domestic legal entity to Kim, a U.S. citizen.

The court's decision hinges on the principle of preventing irreparable harm to Coupang. It found that suspending the FTC's designation was an urgent necessity and that such a suspension would not negatively impact public welfare. This ruling means the FTC's designation, made on May 1, will be on hold until 30 days after the main court ruling is delivered. The FTC's request for information regarding Kim Beom-seok, made in April, is also suspended for the same period.

The FTC's designation aimed to identify the individual who effectively controls a corporate group under the Fair Trade Act. Such designation requires the individual and their relatives to report their domestic and foreign affiliate holdings annually and face potential criminal charges for violations like self-dealing. Coupang was initially designated with its domestic legal entity as the total owner since becoming a publicly disclosed conglomerate in 2021.

The FTC changed its stance in May, arguing that Kim Beom-seok's brother, Kim Yu-seok, who holds a senior position at Coupang's domestic entity, was actively involved in management. This, the FTC contended, indicated Kim Beom-seok's substantial control. Coupang contested this, asserting that neither Kim Beom-seok nor his relatives hold significant shares in domestic affiliates, thus eliminating concerns of private enrichment. The court's interim decision favors Coupang's argument, pending the full resolution of the lawsuit.