Antitrust regulator to set guideline on designating company chief

Korea's Fair Trade Commission [YONHAP]

The country’s antitrust regulator is devising guidelines on how to determine a company’s chief, with rules covering both Koreans and foreign nationals.

The Fair Trade Commission (FTC) designates what it calls the “same person” — a chief or de facto leader of Korea’s large business groups — in scrutinizing corporate practices and regulating anticompetitive activities.

The designation is important because it can affect the subject and scope of regulation under which a company is subject. The regulator applies stricter rules to the companies headed by the same chief when they engage in certain business and financial transactions.

So far, there have been no stated guidelines regarding the designation or any clauses about whether a foreign national can be considered a chief.

The problem became evident when the FTC was trying to decide the chief of Coupang.

Given that Coupang's founder and CEO Bom Kim holds U.S. citizenship, the FTC refrained from designating him as a chief. Instead, Coupang itself was designated as an incorporated unit.

Once the guideline is drawn, the regulator will apply it regardless of nationality.

“The FTC made it clear that the proposed guidelines only provide general principles, irrespective of the nationality of the same person, regarding the criteria for determining the same person,” said Kim & Chang, Korea’s largest law firm, in its report on assessing the proposed guideline.

“However, with respect to the designation of a foreign national as the same person, based on the results of a survey on the status of foreign nationality holdings, a study conducted for this year’s business group designation, the FTC plans to revise the enforcement decree, in full consultation with the relevant ministries, including the Ministry of Trade, Industry, and Energy,” the statement read.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]