Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Coupang founder avoids responsibility despite catastrophic data breach
Coupang founder Bom Kim attends the Allen & Company Sun Valley Conference in Idaho, July 8, 2022. Courtesy of Coupang
By Nam Hyun-woo
E-commerce giant urged to invest in social responsibility
Despite a massive data leak at Coupang that is unnerving Koreans, its founder and de facto head Kim Bom-suk, also known as Bom Kim, has been absent from the accountability debate. This is prompting criticism that the company’s ownership and governance structure enables him to maintain dominant control over the e-commerce giant while avoiding responsibility for major incidents.
Park Dae-jun, CEO of Coupang Corp. (Coupang Korea), on Sunday apologized for the data leak of 33.7 million customers — presumably its entire customer base — and said the company will closely cooperate with relevant authorities to prevent further issues and review its data security system.
The number of known victims represents nearly 65 percent of Korea’s population, and public anger is intensifying over the company’s inadequate security practices and handling of the incident. Multiple online forums have opened to organize a potential class-action suit against Coupang, including one on Naver that surpassed 70,000 members on Monday. Lawmakers have also raised their voices, calling for accountability and stricter oversight.
Despite the mounting uproar, Coupang's responses have been coming out with oversight by Park, a government affairs specialist who joined the company in 2012 and was appointed co-CEO in 2020. The founder resigned from Coupang Corp.’s board in 2021 after a massive fire broke out at one of its logistics centers in Gyeonggi Province and killed a firefighter.
A Coupang delivery bag is seen in front of Coupang Corp. headquarters in Songpa District, Seoul, Monday. Yonhap
Kim, a Korean American entrepreneur, controls the company as CEO and board chairman of Coupang Inc., a Delaware-based entity listed on the New York Stock Exchange. Coupang Inc. wholly owns Coupang Global LLC, which in turn holds 100 percent of Coupang Corp.
According to Coupang Inc.’s regulatory filing in April, Kim holds 164.4 million shares, including stock options, representing about 9 percent of the company’s total 1.8 billion shares. However, he holds mostly Class B shares, which carry 29 times more voting power than Class A shares, giving him effective voting power of 74.3 percent.
Through the dual-class share structure, Kim can maintain control of the company even with a relatively small stake, effectively allowing him to run Coupang according to his own philosophy. Since Class B shares are not traded on the open market, their value is not directly affected by a drop in Coupang’s stock price — even in the event of a major incident such as the latest data leak.
Due to this structure, critics argue that Kim can make key decisions at Coupang while bearing only limited responsibility.
Beyond the data leak, Coupang is also under fire for the harsh conditions faced by its night-shift workers, with more than 20 on-duty deaths reported since 2020. The company is additionally the subject of a special counsel investigation after its subsidiary, Coupang Fulfillment Services, was found to have revised internal rules to avoid paying severance to day laborers with more than a year of accumulated service.
The National Assembly has repeatedly called for Kim to appear at hearings and audits regarding these incidents, but he has not attended, citing his overseas residence, leaving Park to represent the company. Ahead of the latest Assembly session, Coupang instead chose to significantly expand its government affairs team.
Industry officials and experts note that when a controlling shareholder is insulated from responsibility, the corporate governance structure tends to weaken compliance and security systems, which are areas less directly tied to profit generation.
“Coupang has grown rapidly in size, but its internal organization remains immature, resulting in a lack of systems to strengthen corporate ethics and social responsibility,” Sookmyung Women’s University professor Suh Yong-gu said.
“Coupang should move beyond investing heavily in logistics infrastructure and increase investment in people and social systems to reinforce its responsibility as a corporate citizen.”
SK Group Chairman Chey Tae-won bows in apology for SK Telecom's customer data leak during a press conference at the telecom's headquarters in Seoul, May 7. Joint Press Corps
Given past precedent and his current position, industry officials say it is unlikely that Kim will appear at National Assembly hearings or issue a public apology.
“Even though he has stepped down from the board of Coupang Corp., he will inevitably need to step forward as the company’s leader during key moments, such as decisions on compensation or penalties,” a conglomerate official said.
Earlier this year, SK Group Chairman Chey Tae-won apologized to the public for a massive data leak at SK Telecom, even though he did not hold any shares or a seat on the company’s board.