Coupang Fulfillment Services CEOs Indicted Over May 2023 Severance Rule Change
Updated (6 articles)
Indictments Target Current and Former CFS Leaders Special counsel Ann Gweon‑seob announced on Feb. 3, 2026 that Chung Jong‑chul, the incumbent CEO of Coupang Fulfillment Services, and his predecessor Eom Seong‑hwan have been formally charged under the Employee Retirement Benefit Security Act for alleged unpaid severance obligations [1]. The indictment marks a rare prosecution of senior e‑commerce executives in South Korea. Both executives face accusations of deliberately avoiding statutory retirement benefits.
May 2023 Rule Revision Restricted Severance for Long‑Term Daily Workers Prosecutors allege that in May 2023 CFS altered its employment rules so daily workers with more than one year of service must work at least 15 hours each week to qualify for severance [2]. The new regulation resets the benefit calculation if an employee falls below the 15‑hour threshold in any week, effectively denying payouts to many long‑tenured staff [2]. This contrasts with the existing law, which permits severance after one year of continuous employment and an average of 15 hours per week over four weeks [2].
Internal Documents Reveal Potential Savings of Tens of Billions Won During a raid on CFS headquarters, investigators seized a memo estimating that the May 2023 amendment could reduce severance liabilities by tens of billions of Korean won [2]. Evidence also shows the company applied revised internal severance guidelines a month before the official rule change, suggesting pre‑emptive avoidance of legal duties [1]. The financial motive underscores the seriousness of the alleged misconduct.
Investigation Occurs Amid Data‑Leak Fallout and Parliamentary Scrutiny The indictment follows a November 2025 breach that exposed personal data of nearly 33 million Coupang customers, intensifying public and regulatory pressure on the firm [1]. Additionally, Chung Jong‑chul testified before the National Assembly’s labor committee on Oct. 15, 2025, highlighting his ongoing involvement in labor‑related issues [2]. These contexts amplify the significance of the current legal actions.
Sources
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1.
Yonhap:Coupang Affiliate Executives Indicted Over Unpaid Severance Pay: reports the Feb. 3 indictment of current and former CFS CEOs, details the May 2023 rule change, internal guideline timing, and links to the November data breach .
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2.
Yonhap:Special Counsel Questions Coupang Affiliate CEO Over Severance Pay Changes: describes the Feb. 2 interrogation of CEO Chung Jong‑chul, outlines the specific 15‑hour weekly requirement, cites an internal memo estimating tens of billions won in saved costs, and notes his prior parliamentary appearance .
Timeline
May 2023 – Coupang Fulfillment Services revises its employment rules, requiring daily workers with over one year of service to work at least 15 hours per week to qualify for severance; the change resets benefit calculations if a week falls below the threshold, a move prosecutors say would save the company “tens of billions of won” in severance costs[2].
Jan 2025 – The Bucheon branch of the Ministry of Employment and Labor refers the severance‑pay dispute to prosecutors, recommending indictment of Coupang Fulfillment Services for violating the Act on the Guarantee of Employees’ Retirement Benefits[5].
Apr 2025 – The Incheon District Prosecutors Office’s Bucheon branch declines to indict Coupang Fulfillment Services, halting the case despite the ministry’s referral[5].
Nov 2025 – A data breach at Coupang exposes personal information of nearly 33 million customers, intensifying public scrutiny of the e‑commerce giant and its labor practices[1].
Oct 15, 2025 – CFS CEO Chung Jong‑chul appears before the National Assembly’s labor‑ministry inspection, highlighting his ongoing involvement in labor‑policy matters[2].
Oct 2025 – In a National Assembly audit, former prosecutor Moon Ji‑seok alleges senior prosecutors pressured him to drop charges against Coupang, naming deputy head Kim Dong‑hee and head Uhm Hee‑joon as interveners[4].
Dec 23, 2025 – Special counsel Ann Gweon‑seob leads a raid on Coupang Fulfillment Services’ Songpa office, seizing data related to the May 2023 rule change and alleged unpaid severance for daily workers classified as full‑time[6].
Dec 29, 2025 – A second raid targets Coupang’s Songpa headquarters and its logistics unit, seeking records on severance obligations for seven daily workers (≈15.23 million won) and probing possible senior‑prosecutor interference[5].
Jan 7, 2026 – Prosecutor Kim Dong‑hee is summoned as a suspect for alleged abuse of power and leaking investigative information to Coupang’s lawyers; she denies the claim, stating it is “a one‑sided claim by Moon” and that the special counsel will uncover the truth[4].
Jan 27, 2026 – Special counsel agents raid the Ministry of Employment and Labor headquarters in Sejong, confiscating phones and documents from officials to gather evidence on Coupang’s severance‑pay dispute; a spokesperson says the raid aims to confirm “various suspicions related to Coupang”[3].
Feb 2, 2026 – CFS CEO Chung Jong‑chul is questioned by special counsel investigators about the May 2023 rule amendment that narrowed severance eligibility, following earlier questioning of his predecessor and a raid on Coupang’s headquarters[2].
Feb 3, 2026 – Special counsel formally indicts current CFS CEO Chung Jong‑chul and former CEO Eom Seong‑hwan under the Employee Retirement Benefit Security Act for allegedly altering internal severance guidelines a month before the official rule change to evade statutory payments[1].
All related articles (6 articles)
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Yonhap: Coupang Affiliate Executives Indicted Over Unpaid Severance Pay
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Yonhap: Special Counsel Questions Coupang Affiliate CEO Over Severance Pay Changes
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Yonhap: Special Counsel Raids South Korean Labor Ministry Over Coupang Severance Dispute
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Yonhap: Senior prosecutor Kim Dong-hee questioned by special counsel over alleged interference in Coupang severance probe
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Yonhap: Special prosecutors raid Coupang again over unpaid severance pay
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Yonhap: Special prosecutors raid Coupang affiliate over unpaid severance pay