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Photo courtesy of Yonhap News |
[Alpha Biz= Ellie Kim] A court hearing was held on June 16 to determine whether to suspend the effectiveness of a regulatory decision designating Kim Bom-suk, chairman of Coupang Inc., as the group’s “designated controlling shareholder” (same person).
The Seoul High Court’s Administrative Division 7 conducted a hearing on Coupang’s request for an injunction to halt the Fair Trade Commission’s (FTC) decision pending the outcome of the main administrative lawsuit.
Coupang argued that the Fair Trade Commission reversed its position without any material change in circumstances, after having designated the corporate entity as the controlling party for the past five years. The company emphasized that its structure differs from typical domestic conglomerates, as it operates as a foreign-based corporate group.
The company also warned that maintaining the revised designation could cause irreparable harm, including the risk of investor lawsuits if additional disclosures beyond those required by the U.S. Securities and Exchange Commission (SEC) are triggered.
In response, the FTC maintained that new findings from an on-site inspection this year justified the change. It stated that Kim’s brother, Kim Yuseok, was found to be effectively involved in management, providing grounds to designate Kim Bom-suk as the controlling individual.
The regulator cited factors such as executive-level status, participation in decision-making, and influence over operations as criteria supporting its determination. It also argued that, in principle, large business groups should designate a natural person as the controlling entity, and that the FTC has broad discretion in such decisions.
The court questioned the FTC’s rationale, noting that the basis for changing the designation following the inspection was not sufficiently clear, and requested a more detailed explanation regarding its reassessment of Kim Yuseok’s role.
The court said it will issue a decision before July 15, the deadline for a previously ordered temporary suspension of the FTC’s designation.
The dispute stems from the FTC’s April 29 decision to replace Coupang’s corporate entity with Kim Bom-suk as the designated controlling shareholder. Coupang subsequently filed an administrative lawsuit on May 8 seeking to overturn the decision, along with a request for injunctive relief.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
