☞Subscribe to the Hankyoreh newsletter H:730. Type ‘Hankyoreh h730’ in the search bar . Coupang, which is listed on the New York Stock Exchange, and its current and former executives, including CEO Kim Beom-seok, filed a ‘ class action ‘ and a ‘shareholder derivative suit
‘ on the grounds that the stock price had plummeted due to local violations of labor rights and safety negligence . It was confirmed that he had been harmed. A class action lawsuit is one in which the plaintiff claims to have suffered damage due to the company’s fault and demands compensation on behalf of all victims, while a shareholder representative lawsuit demands that shareholders hold executives accountable and compensate the company for damages. According to the U.S. District Court for the Southern District of New York and American journalist Ahn Chi-yong on the 6th, the New York City Public Employees’ Pension Service was designated as the lead plaintiff in the class action lawsuit against Coupang and CEO Kim in March. It is a merger of class action lawsuits filed last year by Korean investor David Choi, the North Carolina and New Mexico treasuries, Naya Fund, and New York City Public Employees Pension. The New York City Civil Service Pension is a pension subscribed to by New York City police, firefighters, teachers, and school staff, and is the fourth largest pension fund in the United States (total size of 330 trillion won). In the complaint submitted to the court, they said, “Coupang filed an initial public offering ( IPO) with the New York Stock Exchange in March 2021.
) Not only did the report contain false or misleading information, but the company continued to engage in unfair practices even after listing, causing enormous losses to those who believed in the report and invested in it,” he said, claiming compensation for damages for violating federal securities laws.
Last August, individual investors also filed shareholder lawsuits against CEO Kim and others. They also claimed that CEO Kim and other executives violated their fiduciary duty (the duty of care of a good manager) and caused damage to the company by making claims that were false or could be misunderstood by investors.
According to the complaint filed last May by the New York City Public Employees’ Pension Service, the lead plaintiff in the class action lawsuit, the basis for the lawsuit is Coupang’s poor working environment and unfair trading practices. Specifically, it is said that the successive deaths of ‘Coupang men’, such as Deok-Jun Jang, who died while working late at night in October 2020, are different from the ‘safe working environment’ stated by Coupang in its report. Mr. Jang, who was working as a Coupang man at the time, lost 15 kg in weight and also complained of chest pain on the day of his death. The Daegu Occupational Disease Determination Committee announced that it was confirmed that Mr. Jang worked an average of 62 hours and 10 minutes in the last week before his death, and an average of 58 hours and 40 minutes in the last 12 weeks before his death. However, at the beginning of Mr. Jang’s death, Coupang claimed through newsrooms, etc. that “the average working hours per week for the past three months was about 44 hours,” but deleted this when the industrial accident was recognized.
That’s not all. At Coupang’s Bucheon Logistics Center, 152 confirmed coronavirus cases occurred in May 2020 due to not wearing masks and insufficient social distancing. Coupang refuted that it had complied with the quarantine guidelines, but the Bucheon Branch of the Central Employment and Labor Administration sent a Coupang official who was booked on charges of violating the Occupational Safety and Health Act in June last year to the prosecution with a recommendation for indictment.
The fire at the Deokpyeong Logistics Center in Icheon, Gyeonggi-do, which occurred in June 2021 after listing in the U.S., was also on the chopping block. In this fire incident, which caused large-scale damage, including the death of one firefighter, when the emergency bell rang, the management company employee pressed the ‘recovery key’ six times to stop the emergency bell, increasing the damage. Even before the fire, about 270 defects related to sprinklers, alarms, and fire shutters were pointed out during a comprehensive firefighting facility inspection, but it was revealed that Coupang did not correct them.
Regarding this issue, the New York City Public Employees Pension Service stated in the report submitted by Coupang at the time of its listing, “We consider our relationship with our employees to be positive,” and “We directly hire Coupangmen and provide sufficient paid vacation and welfare benefits.” “It shows that innovation can create both a better world for customers and a better workplace for employees,” but in reality, workers’ health rights were continuously violated and even basic fire safety measures were not followed. He emphasized that the contents of the report were false.
Unfair dealings with suppliers were also pointed out as a problem. In August 2021, the Fair Trade Commission △requested suppliers to increase the selling price of competing online malls (2017-September 2020), △required advertising from suppliers to compensate for margin losses, and △passed the entire promotional cost to the supplier. △It was discovered that sales incentives that were not stipulated in the agreement were received. Accordingly, a corrective order and a fine of 3.2 billion won were imposed on charges of violation of the Fair Trade Act and the Large-Scale Distribution Business Act. Here are먹튀검증 our products ( PBIt was also pointed out that the Fair Trade Commission has launched an investigation into allegations that the review ranking algorithm was manipulated to favor WoW members and that products were sold to non-members at a lower price than to ‘Wow members’. Regarding this, “Coupang stated that it ‘supports hundreds of thousands of suppliers and sellers on a small scale’ and ‘provides opportunities to advertise on Coupang’s website and mobile app,’ but by forcing people to purchase services or manipulating the prices of their products, etc. “The fact that he committed an unfair act was not disclosed,” he pointed out.
Coupang’s stock price started at an offering price of $35 when it was listed on March 11, 2021, and closed at $49.52. However, the stock price plummeted every time labor exploitation, logistics center fires, unfair transactions, etc. were revealed. The closing price on the 5th (US time) was $18.58, which is half the public offering price. As a result, investors suffered large losses. It is reported that the New York City public pension fund also purchased 4.68 million shares for $125.66 million at the time of listing, but suffered a loss of over $41 million. Regarding this, Professor Seungyoung Yoon (Law) of the College of Foreign Studies said, “In a situation where ESG
management , which emphasizes corporate social responsibility, is becoming increasingly important, the key is how Coupang explained the labor environment and social responsibility during the listing process, such as in the securities report.” He said, “The Supreme Court dismissed a class action lawsuit filed against Omnicare, the largest pharmacy chain in the U.S., on charges of falsifying its securities report, but the company’s responsibility was acknowledged in the second trial, and there is a growing trend of emphasizing corporate social responsibility, so the plaintiff’s “It is difficult to rule out the possibility of winning the case,” he said. Kim Woo-chan, a professor of business administration at Korea University, said, “Although class action lawsuits and shareholder representative lawsuits are possible in Korea, it is much easier in the United States.” He added, “Although we have avoided domestic regulations by listing in the United States, the risk of such lawsuits can be seen as greater.” said. Even though Coupang is a large conglomerate, it is avoiding the same people. If CEO Kim Beom-seok is designated as the same person, the status of stocks held by spouses and relatives and details of transactions made with their affiliates must also be disclosed.
In response, Coupang said, “Such lawsuits are commonly experienced by most major companies listed in the U.S., and these lawsuits appear to be groundless,” adding, “We have already dismissed this as it fails to raise the fact that there was an actual violation.” A motion to dismiss the suit has been submitted. “Coupang plans to actively respond to these unfounded claims,” he said.