Seoul court denies arrest warrant for Qoo10 CEO

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Seoul court denies arrest warrant for Qoo10 CEO

Published: 11 Oct. 2024, 11:10 Updated: 11 Oct. 2024, 11:12

Qoo10 CEO Ku Young-bae, cental, attends a hearing at the Seoul Central District Court on Thrusday 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. [YONHAP]

A Seoul court on Thursday rejected an arrest warrant for Qoo10 CEO Ku Young-bae on fraud and embezzlement charges related to his e-commerce group's large-scale payment delays to vendors.

The Seoul Central District Court made the decision following a hearing attended by Ku, citing the need to "guarantee his right to defense" and the low probability he will flee or destroy evidence.

The court also denied arrest warrants for Ryu Kwang-jin and Ryu Hwa-hyun, CEOs of Qoo10's e-commerce subsidiaries TMON and WeMakePrice, respectively, following hearings earlier in the day. Both are accused of involvement in the massive insolvency incident.

Earlier Thursday, 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 ($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.

Yonhap