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Internal Coupang records show efforts to make Kim Bom-suk legally untouchable

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Internal Coupang records show efforts to make Kim Bom-suk legally untouchable

In 2021, when Coupang began trading on the New York Stock Exchange, its founder, Kim Bom-suk, stepped down from all official posts at the company’s Korean office, citing a desire to “focus on global management.”

However, internal documents and communication records dating from 2016 to 2020 submitted to a Korean court by the company’s former chief privacy officer as part of a wrongful termination case and viewed by the Hankyoreh suggest that Kim’s resignation from those roles was no simple management decision.

The materials reveal that lengthy discussions took place to absolve Kim, who goes by Bom Kim in the US and serves as CEO and chairman of the board for US-based Coupang Inc., of responsibility at the Korean subsidiary in preparation for various controversies.

These discussions date back to October 2018. In 2017, Coupang came under fire during a parliamentary audit for not paying its “Coupang Men” delivery drivers their overtime wages by implementing a blanket wage system. Controversy only mounted when, in 2018, the company’s test run of its early-morning delivery service revealed brutal working conditions and a hostile work environment.

Internally, Coupang had begun to discuss the possibility that Kim would be subject to government-led investigations. According to the documents submitted to the court, Sam O’Brien, Coupang’s vice president of legal and chief of staff to the chief administration officer, exchanged messages through the encrypted messaging app Signal, saying that “the second issue” was “that some guy from the Labor Office will question Bom about some CDM issue,” using shorthand for Coupang delivery men.

“[A]pparently, we can’t get out of this one,” O’Brien wrote.

O’Brien went on to suggest that appointing Kim as a “‘Founder’ role and CEO of LLC,” while appointing another local Korean as CEO could be a viable solution.

O’Brien wrote that “apparently Sue Lynn was looking into this at one point,” referring to a legal adviser for Coupang at the time.

O’Brien mentioned that one of the possible candidates to fill Kim’s shoes was someone whom he had played golf with from the law firm Kim & Chang. The former CPO informed the Hankyoreh that this was a reference to Kang Han-seung, who indeed went on to serve as CEO of Coupang Korea.

Kang was brought on to be Coupang’s representative director of business management in October 2020 after acting as a legal adviser to the company following his career as a partner at Kim & Chang and as a secretary to the president for legal affairs during the Lee Myung-bak administration.

After Coupang’s initial public offering on the New York Stock Exchange in 2021, Kim stepped down as chairperson of Coupang Korea and as registered director, finally bringing to fruition the discussions that had taken place years earlier about splitting the corporation and appointing a separate CEO to disperse legal liability related to Korean operations.

The documents also suggest that attempts were made in April 2020 to decrease Kim’s exposure to the public. The documents show that Harold Rogers, the former chief administrative officer who has currently taken over as CEO of Coupang Korea, asked the head of the “people operations” department that direct reports filed by executives to Kim through Outlook and Workday, Coupang’s internal human resource management systems, be hidden. This request seems to have been an attempt to hide Kim’s existence and impact within the company’s official organization chart.

Internal records also revealed the company’s opaque decision-making process. An email sent by a member of the information security department’s security policy team asked staff to “refrain from sharing the contents of important meetings over e-mail.”

The documents provided to Korean courts by the former chief privacy officer also reveal that, when discussing over Signal how to respond to the mass breakout of COVID-19 in one of Coupang’s distribution centers in May 2020, Kim wrote, “Ok let’s keep the communications off email.”

Kim Kyu-shik, a director at the Korean Corporate Governance Forum, suggested that while Coupang’s system has “many faults,” it didn’t necessarily violate corporate governance principles.

“The true problem lies in the fact that, even though the US corporation makes the major decisions, the business operates in Korea. As such, the Korean subsidiary is evading regulations in Korea while the US parent company is evading regulations in the US,” he added.

“The Korean subsidiary’s board must have internal control structures, such as a special committee capable of monitoring and supervising health, human rights, safety and security,” Kim Kyu-shik added.

Reached for comment, Coupang claimed that a “former executive who was dismissed five years ago [in 2020] is unilaterally making distorted claims out of disgruntlement,” while stressing that the company “won in both the first and second trials in the related legal case.”

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