South Korea’s antitrust regulator has designated Coupang Inc. Chairman Kim Beom-seok as the company’s “same person,” the individual deemed to ultimately control a business group. The Fair Trade Commission said it concluded Kim’s younger brother, Kim Yu-seok, a Coupang vice president, effectively took part in management and exercised influence.
The FTC also said the number of disclosure-designated business groups — conglomerates with total assets of at least 5 trillion won — will rise by 10 to 102.
Line among 11 newly designated conglomerates; Kyobo Life, Daou Kiwoom moved up
The FTC said April 29 it will designate, effective May 1, 102 business groups with assets of at least 5 trillion won, covering 3,538 affiliated companies. That compares with 92 groups last year.
Newly designated groups are Line, Korea Teachers’ Credit Union, Woongjin, Shieldus, Daemyung Chemical, Toss, Kolmar Korea, Heesung, Orion, QCP Group and Iljin Global. Youngone was removed after its total assets fell.
Among the conglomerates, 47 groups with assets of at least 12 trillion won — equal to 0.5% of the latest finalized nominal gross domestic product figure of 2,408.7 trillion won — were designated as cross-shareholding-restricted groups. That is up by one from last year. Kyobo Life Insurance and Daou Kiwoom were moved up, while E-Land was moved down to the conglomerate category.
The FTC said rapid growth in industries tied to K-beauty and K-food helped push Kolmar Korea and Orion into the conglomerate list. It also cited a strong stock market as a factor in Daou Kiwoom’s upgrade and Toss’ designation.
With geopolitical tensions boosting demand for defense products, the rankings of groups with defense affiliates — including Hanwha, Korea Aerospace Industries and LIG — rose, the FTC said. It added that higher precious-metal prices and a weaker won helped bring in Heesung and Iljin Global.
Starting May 1, affiliates of conglomerates will be subject to Fair Trade Act requirements including disclosure obligations and a ban on providing unfair benefits to related parties. Cross-shareholding-restricted groups face additional limits, including bans on cross-shareholding and circular shareholding, restrictions on debt guarantees, and limits on voting rights for financial and insurance companies.
FTC cites Kim Yu-seok’s management role; Kim Beom-seok designated after five years
The FTC designated Kim Beom-seok as Coupang’s controlling person. Since Coupang was first included as a conglomerate in 2021, Kim had avoided the designation because he is a U.S. citizen and, the FTC said, relatives were not participating in management. Questions grew last year after it became known that his brother was serving as a Coupang vice president.
The FTC said it conducted an on-site inspection of Coupang ahead of this year’s designations and concluded the group did not meet the enforcement decree’s exception requirements. It said Kim Yu-seok holds a near-top internal rank comparable to the level of CEOs at major affiliates.
Choi Jang-gwan, director general of the FTC’s Corporate Group Monitoring Bureau, said Kim Yu-seok’s annual pay is in line with the average for registered executives at the same level and that he received treatment comparable to a registered executive, including being assigned a secretary. Choi said Kim Yu-seok hosted “hundreds” of regular and ad hoc meetings on logistics and delivery policy and “effectively exercised influence” over specific directions for executing key business matters.
With Kim Beom-seok designated, Coupang will be required to disclose the status of its overseas affiliates. If overseas affiliates directly or indirectly hold shares in domestic affiliates, the company must also disclose the controlling person’s shareholdings in those overseas affiliates.
Responding to criticism that the FTC’s view differs from past decisions, Choi said conglomerate designations are based on company-submitted materials and that the agency has pursued accountability after the fact when false submissions or other problems are found. He said issues were raised during a Coupang hearing and a report was received alleging Kim Yu-seok’s management participation, leading the FTC to identify matters it had not previously found.
Unlike Coupang, Dunamu met the enforcement decree’s exception requirements, so the corporate entity Dunamu remained the controlling person, the FTC said. For Jungheung Construction, the FTC said it will change the controlling person to Vice Chairman Jung Won-ju, the eldest son, following the death of former controlling person Chairman Jung Chang-sun.
Choi said the designation aligns the person who effectively controls a business group with the individual ultimately responsible for compliance, reducing gaps between authority and responsibility. He said the FTC will sequentially release information based on more advanced analysis of the designated groups to provide useful information to market participants.
* This article has been translated by AI.
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