Mergeplus raided by police, 3 executives told not to travel

Police officers raid headquarters of Mergeplus in Yeongdeungpo District, western Seoul, on Wednesday. The company is under investigation on charges of violating the Electronic Financial Transaction Act. [YONHAP]

Mergeplus was raided by police Wednesday, and three of the company’s executives have been restricted from traveling overseas.

The financial crime investigation team of the Seoul Metropolitan Police Agency on Wednesday morning raided five locations, including the Mergeplus headquarters in Yeongdeungpo District, western Seoul, offices of a related company and three payment-settlement companies.

Three executives including Mergeplus CEO Kwon Nam-hee, who have been told by police not to leave the country, are under investigation for violating the Electronic Financial Transaction Act.

The Financial Supervisory Service reported Mergeplus to the Seoul Metropolitan Police Agency last week after the company repeatedly refused to deliver its books to the regulator.

Mergepoint, an app operated by Mergeplus, sold digital coupons that can be used to get 20-percent off at a wide range of establishments, including supermarkets, convenience stores and coffee shops.

While the app quickly grew in popularity, attracting around a million subscribers, problems arose earlier this month as the company suddenly stopped issuing new coupons and reduced the number of stores where the coupons could be used.

The change in terms came after the financial regulators issued warnings that Mergeplus had not properly registered its business with the Financial Services Commission.

Customers swarmed the offices of Mergeplus to ask for refunds but have been disappointed by the amount and pace of compensation.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]