Qoo10 CEO Ku Young-bae (C) attends a hearing at the Seoul Central District Court on Oct. 10, 2024, as the court is to decide whether to issue an arrest warrant for him over a large-scale insolvency incident involving vendors on his e-commerce platforms. (Image courtesy of Yonhap)
SEOUL, Oct. 10 (Korea Bizwire) — Qoo10 CEO Ku Young-bae attended a court hearing held on Thursday to determine whether to issue an arrest warrant on fraud and embezzlement charges related to his e-commerce group’s large-scale payment delays to vendors.
Ku appeared at the Seoul Central District Court for his hearing, which will be shortly followed by arrest warrant hearings for Ryu Kwang-jin and Ryu Hwa-hyun, CEOs of Qoo10′s e-commerce subsidiaries TMON and WeMakePrice, over the massive insolvency incident
Ku denied speculations that he had known about his group’s potential insolvency for two years but allowed vendors to continue operating on the group’s e-commerce platforms, only for their remittances to default.
“Once again, I sincerely apologize to the victims and the public,” he said.
In late July, TMON and WeMakePrice filed for corporate rehabilitation with the Seoul Bankruptcy Court after failing to make payments to vendors using their platforms, resulting in over 1.5 trillion won (US$1.1 billion) in overdue payments.
Prosecutors have since launched an investigation, accusing the corporate heads of defrauding vendors by having them continue business on their platforms despite knowing that they could not make vendor remittances.
They are also accused of causing nearly 70 billion won of losses to TMON and WeMakePrice by funneling orders to another Qoo10 subsidiary, QXPRESS, and embezzling 67.1 billion won from TMON and WeMakePrice to finance the parent firm’s takeover of the American online e-commerce platform Wish.
Prosecutors suspect the CEOs recognized signs of potential insolvency two years ago but underreported their overdue vendor payments to financial authorities, reporting only 46 billion won as of the end of 2022, which accounted for one-tenth of the actual amount.
The court’s decision on whether to grant arrest warrants for them is expected late Thursday at the earliest.
(Yonhap)
