‘Why did Coupang choose the US rather than Korea?’ In response to the news of Coupang’s promotion of listing on the New York Stock Exchange, a number of the media posed such a’question’ and suggested that it is because’differential voting rights’ are in the US and not in Korea. However, the evidence is weak. Some point out that the’question’ itself was wrong in the first place.
The media coverage was offensive and at the same time categorical. The Chosun Ilbo said, “Think why Coupang is going to the US stock market instead of in Korea”, “(The US) gave the founder a reliable means of defense of management rights by allowing the founder to exercise 58% of the voting rights even if he had only 2% stake. On the other hand, the domestic commercial law does not recognize such differential voting rights.” JoongAng Ilbo columnist Lee Chul-ho said in a named column, “Coupang turned to the New York Stock Exchange after worrying because of the differential voting rights.”
The media, paying attention to’differential voting rights’, continued to criticize and warn the government. The Chosun Ilbo warned that “unless the regulations restricting corporate activities and management rights are improved, the cases of promising companies leaving the Korean stock market and listing overseas will continue.” “Coupang’s’differential voting rights’ called by New York, why not domestic flights?” (Korea Economy) “Immediately create measures to defend management rights such as differential voting rights” (Seoul Economic Daily) “Coupang went to New York, differential voting rights were split” Economic newspapers more blatantly demanded the introduction of’differential voting rights’.
‘Differential voting rights’ is a system that puts’differential’ on stock voting rights as it is expressed. Beyond the basic structure of having 1 vote per share, it enables more rights to be exercised even with 1 share. It is true that Kim Bum-seok, Chairman of the Coupang Board of Directors, reported that it would grant differential voting rights with 29 votes per share. However, Coupang has never disclosed that it has been listed in the United States for differential voting. This was only the result of the media’s interpretation of the phenomenon.
If so, was this interpretation appropriate? Professor Park Sang-in of Seoul National University School of Public Administration pointed out, “The premise that Coupang was trying to choose between Korea and the United States was wrong.”
First of all, the company promoting listing this time is not a Korean company. The subject of listing promotion is not Coupang, a Korean company, but an American company called CoupangLLC (Coupang Limited). Korea’s Coupang is operated in a way that the US parent company owns 100% of its domestic stake. The nationality of Chairman Kim Bum-seok is also the United States.
It is not appropriate to treat a U.S. company listing in the U.S. as a case of a domestic company moving abroad. In this regard, the Citizens’ Federation for Economic Justice Practices commented and pointed out that the media report was’hodo to the public’ and said, “The listing of Coupang Co., Ltd. in the US is similar to the fact that a player who will debut in the US major leagues does not play in the domestic league, but goes directly to the major leagues. The same thing.”
It may be considered that the company promoted listing on the U.S. stock market to exercise differential voting regardless of whether the company has’nationality’, but the reason for such a view is not clear. On the contrary, it is not difficult to find the context that Coupang is a company designed to enter the US.
Professor Sang-in Park said, “It is reasonable to think that the company structure was created with plans to list in the US from the beginning.” “The parent company raised funds mainly from foreign investors, not domestic. It should also be noted that it has established its headquarters in the US state of Delaware. In case of disputes with investors, there is a system that is advantageous for companies, so many companies set up their headquarters here like Paper Company.” He said, “There was only a choice between the NASDAQ or the New York Stock Exchange. “Kospi wasn’t an option.”
Chairman Kim Bum-seok himself revealed early on the promotion of listing in the United States. The’Don Tech Movie’ Facebook channel dealing with financial investment, etc., shared an article at a press conference for the first year of Coupang’s establishment in 2011 and refuted the media that emphasized’differential voting rights before winning. At the time, Chairman Kim Bum-seok said, “We will be listed on NASDAQ within two years.” The media’s criticism that’it has changed its direction to listing in the US’ is’the fact’ is wrong.
Actually, early investor Kim Han-joon, CEO of Altos Ventures, said through Facebook, “(differential voting rights) do not make the decision to list on any stock market because of that.” “(Differential voting rights) may be a helpful reason, but many Chinese companies “The reason why other foreign companies are listed on the US market is because they can meet and receive investments from the most diverse and intelligent institutional investors.”
If so, what is the reason why the media is’overimmersed’ in differential voting rights, which is hard to see as a’final blow’? There is an important fact that was not mentioned in the article calling for the introduction of’differential voting rights’ by conservative media. It is that’big conglomerates’ want to introduce’differential voting rights’.
‘Differential voting rights’ is an attractive system for large Korean conglomerates who want to control a company with a small stake in that they can have more voting rights than their shares.
The possibility of abuse of differential voting rights has been raised earlier. At the’Symposium for Advancing the Voting Rights Market’ on November 10, 2015, Professor Soon-Seok Kim, a professor at the Chonnam National University Law School, presented the position of’Introduction of Differential Voting Rights’. It is not the same as Korea in terms of problems such as distortion of decision-making,” he said.
Professor Sang-in Park said, “Differential voting rights create a gap between’ownership’ and’control’, but even without differential voting rights in Korea, the gap between ownership and control is larger on average than in the United States. He said, “The conservative regime was not opened because of the great negative effect, but with a simple logic, he was trying to support the chaebol’s longing for business.”
Of course, the National Assembly currently has a bill that introduces multiple voting rights only to venture companies, but once multiple voting rights are allowed, there is a concern that it will be extended to large corporations. In this regard, the Solidarity for Economic Reformation said in a statement, “Even if there are various regulations initially and introduced within a limited range, once they are introduced, they cannot be reversed, and further attempts to amend them will continue to ease regulations and expand the scope of application.” He pointed out that if he breaks down the principle of one-week, one-week voting rights, he will not be able to change the justification for opposing the demand for further revisions from the business world.
This is not the only tendency for conservative and economic media to represent corporate interests through the Coupang issue. Segye Ilbo, “Coupang’s entry into the US… is a precursor to the’post-Korea’ of companies that are blocked from innovation.” In the editorial, “The 3rd Act on Corporate Regulations, etc., puts the shackles on companies, and at the beginning of the year, enactment of a severe disaster punishment law that strengthens punishment He stressed, “We are pushing forward with the amendment to the Distribution Industry Development Act, the Class Action System, and the punitive damage compensation law.”
The entire system of’company dislikes’, which is not directly related to this issue, was linked to the news of the Coupang listing on the stock market. Coupang is used as a’leverage’ rather than’the essence of an issue’.
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