이 기사는 2022년 04월 11일 08:07 thebell 에 표출된 기사입니다.

South Korea’s competition enforcer faces a dilemma about whether to add Bom Kim, founder of ecommerce giant Coupang, to its watch list of heads of the country’s large conglomerates, a year after regulatory loopholes allowed him to avoid tougher scrutiny by the regulator.

The Korea Fair Trade Commission (KFTC) is currently in discussions to improve regulations applied to the country’s conglomerates and their heads, according to sources. It picked Kyungpook National University’s industry-academia collaboration team to evaluate the rules last June and the final evaluation report was submitted to the authorities late last year.

The report reportedly redefined the term of a “foreigner” in the rules and altered the range of relatives of a conglomerate’s head subject to the rules.

Under the current regulation, if the owner of a conglomerate – or someone who in effect has control of a conglomerate – has foreign nationality, a corporate entity becomes subject to the rule instead of a person.

That was the case for Coupang. A year ago, the online retail giant was added to the KFTC’s watch list of large conglomerates as Coupang and its affiliates’ combined assets grew to above the rule’s threshold of 5 trillion won ($4.08 billion) following its successful New York stock market debut in March last year.

At the same time, the KFTC let Coupang to be subject to the rules instead of Kim, who has control of the company, because of his American nationality.

If conglomerates’ heads are added to the KFTC’s watch list – which is updated each year on around May 1 – they and their specially related persons, like their relatives, become subject to tougher scrutiny by the watchdog and also stricter disclosure requirements.

The KFTC has not publicly disclosed details of the evaluation report. “We cannot disclose the report because the decision-making process is still ongoing internally,” a KFTC official said.

Challenges are expected if the regulator decides to push for the revision of the rules to add Kim to its watch list. Above all, that could spark controversy about how other South Korean companies whose owners are foreigners should be treated.

Many think Kim’s inclusion in the regulator’s watch list is less likely for now, especially given time-consuming legislation. The KFTC also remains cautious, saying that it had discussed the matter with the transition team of President-elect Yoon Suk-yeol but “nothing has been finalized”.

If the KFTC fails to add Kim to its watch list, it would continue to face backlash from the country’s other tech giants and industry experts. For instance, Lee Hae-jin, Naver’s founder and global investment officer, and Kakao founder Kim Beom-su are both subject to greater scrutiny by the regulator.

Coupang believes even if Kim is included in the KFTC’s watch list, this would hardly affect the company as its growth has continued even after his resignation as chief executive in 2020, posting the company’s strongest ever annual performance in 2021. Kim also stepped down from the company’s board in June 2021 but remains chair of the board of Coupang Inc, the parent company of Coupang.

Coupang also said the company is being regulated under the competition law like other large conglomerates in the country. “The only difference is that a corporate entity is subject to the rules, not a person,” an official at Coupang said.

“Even if Mr. Kim becomes subject to the rules, there is nothing to be concerned. Information on his specially related persons was already disclosed in US filings.” (Reporting by Hyo-beom Lee)