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Qoo10, TMON, WeMakePrice CEOs indicted for fraud

Published: 11 Dec. 2024, 16:45

CHO YONG-JUN
[email protected]

From left, Qoo10 CEO and founder Ku Young-bae, TMON CEO Ryu Gwang-jin and WeMakePrice co-CEO Ryu Hwa-hyeon [NEWS1]

Qoo10 CEO and founder Ku Young-bae, TMON CEO Ryu Gwang-jin and WeMakePrice co-CEO Ryu Hwa-hyeon were indicted without detention on Wednesday for their role in a large-scale payout crisis across their e-commerce platforms, according to the prosecution.

The three CEOs, alongside seven other executives, were indicted on counts of embezzlement, fraud and malpractice, the Seoul Central District Prosecutors' Office said.

Reports first emerged in late July that TMON and WeMakePrice, both subsidiaries of Qoo10, had fallen behind on payments owed to merchants operating on their platforms. The three currently owe an estimated 1.85 trillion won ($1.30 billion) to vendors, according to the prosecution, a situation which sparked a flood of refund requests and drove payment gateways to exit the platform.

The three executives conspired to embezzle 116 billion won from their companies — 50 percent of which was put toward Qoo10's acquisition of U.S. shopping platform Wish earlier this year — and misappropriate an additional 72.7 billion won, prosecutors said.

The three also concealed their companies' severe financial issues from their listed sellers, according to the indictment, and provided false information about their financial status to both the Financial Supervisory Service and the press.

Prosecutors say they had no intention to pay their sellers back.

The Seoul Central District Court previously rejected an arrest warrant for Ku in October.

BY CHO YONG-JUN [[email protected]]