Meanwhile, it was confirmed that Coupang’s Korean subsidiary expanded its business by guaranteeing trillions of won worth of loans to its U.S. subsidiary.
People come to Korea to make money, receive guarantees, and grow their business, but when problems arise, they turn away from Korea.
Britain’s ‘Farfetch’, the No. 1 online luxury goods platform.
Last year, Coupang’s U.S. subsidiary spent about $500 million, or 660 billion won, to acquire it.
At the time, Coupang borrowed $392 million, or 540 billion won, to acquire Farfetch, and repaid all the debt in July of this year, a year and a half later.
Last July, Coupang’s Korean subsidiary announced to the financial authorities that it “guarantees a loan of 1.5 billion dollars, or 2.0922 trillion won at the exchange rate at the time, to the U.S. corporation.”
It guaranteed the burdensome debt, which amounts to 58.55% of equity capital.
Coupang’s U.S. subsidiary also confirmed the Korean subsidiary’s guarantee through a disclosure to the U.S. securities authorities and revealed that it had received an unsecured loan.
If the American corporation could not repay the money, the Korean corporation could take responsibility.
We borrowed $425 million from JPMorgan Chase Bank and others, and used this money to pay off the debt we owed when acquiring Farfetch.
The Fair Trade Act in principle prohibits debt guarantees between affiliates, but it made an exception for overseas affiliates, and they took advantage of that gap.
This means that Coupang has even provided a loan guarantee to a domestic corporation that Coupang relies on for more than 90% of its sales as a preventative measure to expand its global business.
Chairman Kim Beom-seok sent a letter to the National Assembly explaining his absence from the hearing, saying, “I am busy with work as a global CEO operating in over 170 countries around the world.”
