Seoul, April 29 South Korea's antitrust regulator on Wednesday newly designated Kim Bom, founder of US-listed e-commerce giant Coupang, as the company's de facto controlling entity, placing him under stricter regulatory oversight.
Kim, a U.S. citizen who also serves as chairman of the board, was designated as the "same person" of the group, a legal term referring to the individual who effectively controls a conglomerate, the Fair Trade Commission (FTC) said.
The FTC's decision comes as Coupang, whose business is mostly based in South Korea, has faced heightened regulatory scrutiny in the country following a massive data breach last year involving about 34 million customers, reports Yonhap news agency.
The incident also prompted concerns from the U.S. government, which has raised issues with South Korean authorities over what it views as the potentially discriminatory treatment of the company.
"Substantively, the biggest change will be the disclosure of overseas affiliates," Choi Jang-gwan, a senior FTC official, told reporters. Not only Kim but also his relatives will be required to submit extensive disclosures and comply with detailed investigations by the authorities.
Same-person designations apply to the heads of major business groups, such as Samsung Electronics Chairman Lee Jae-yong, who are subject to additional regulations, including disclosure requirements on intra-family transactions and rules governing holding company structures.
The FTC annually compiles a list of large business groups based on their total assets, subjecting them to regulations. The mandatory disclosure system is intended to promote greater transparency in corporate management.
The FTC said Coupang had previously met all requirements for an exception allowing a corporation, rather than an individual, to be designated as the same person. As a result, the company itself had been named the controlling entity.
However, the FTC determined through on-site inspections that Coupang no longer met key conditions for the exception, as Vice President Yoo Kim, Kim Bom's younger brother, was effectively involved in management.
In particular, the watchdog said it has found that requirements intended to prevent the misuse of corporate control were not satisfied, citing evidence such as compensation records and business activities.
Following the announcement, Coupang said it will seek an administrative litigation asking for the cancellation of this designation.
"As a U.S.-listed entity, Coupang, Inc. is subject to rigorous oversight, including the related-party disclosure obligations required by the Securities and Exchange Commission, making a same-person designation unnecessary and creating conflicts between regulatory frameworks," Coupang said in a press release.
Meanwhile, a total of 102 business groups with assets of 5 trillion won (US$3.4 billion) or more, along with their 3,538 affiliates, were placed on this year's watch list for mandatory filings, the FTC said.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor