A corporate crisis just became a geopolitical one.
Two major U.S. investors in Coupang (CPNG)—Greenoaks and Altimeter Capital—have petitioned the U.S. Trade Representative (USTR) to investigate the South Korean government, alleging a “discriminatory” campaign against the e-commerce giant following its massive data breach.
📉 THE CONTEXT:
- The Breach: In November, Coupang disclosed that data for 33 million customers was compromised.
- The Reaction: Seoul launched a “whole-of-government” response, including labor, financial, and customs investigations.
- The Damage: Coupang shares are down ~27% since the disclosure, wiping out billions in value.
⚔️ THE INVESTOR PLAY: Greenoaks (founded by Coupang board member Neil Mehta) and Altimeter are taking the nuclear option:
- Arbitration Claims: Filed under the U.S.–Korea Free Trade Agreement (KORUS), accusing Seoul of violating investor protections.
- Trade Remedies: Asking the USTR to impose tariffs and sanctions on South Korea if the “harassment” continues.
- The Argument: They claim the regulatory response goes “far beyond normal enforcement” and is designed to cripple a U.S.-listed firm.
🏛️ THE DIPLOMATIC STANDOFF:
- South Korea’s Stance: Trade Minister Yeo Han-koo insists the crackdown is proportionate, stating, “If a Korean company doing business in the U.S. caused such a large-scale leak… the U.S. would naturally do the same.”
- President Lee Jae Myung: Affirmed that South Korea will handle the issue as a “sovereign country” according to law.
💡 ANALYST TAKEAWAY: This is a rare and aggressive move by private equity to weaponize trade treaties against a US ally. By invoking KORUS and triggering a 90-day cooling-off period, Greenoaks is effectively forcing the White House to choose between protecting US capital and maintaining diplomatic harmony with Seoul. If the USTR launches a formal probe (decision due in 45 days), expect volatility not just for Coupang, but for broader US-Korea trade relations.
👇 Trade Lawyers: Does a data breach justify a “whole-of-government” crackdown, or is this a clear case of protectionism disguised as regulation?