Tmon and sister company WeMakePrice are facing a financial crisis after failing to pay settlements to merchants on their platforms since early July.
Qoo10 borrowed 20 billion won ($14.5 million) from Tmon in April to finance its $1.73 billion acquisition of Wish, a U.S.-based global shopping platform, according to Yonhap News. The loan was executed April 11, but Tmon CEO Ryu Kwang-jin signed his approval April 15.
On Jan. 11, Qoo10 also borrowed 5 billion won from Tmon, with the CEO’s approval coming 19 days later.
Qoo10 CEO Ku Young-bae is suspected of diverting funds from Tmon and WeMakePrice to support corporate acquisitions and efforts to list the logistics unit Qxpress on Nasdaq.
Qoo10 acquired Tmon in September 2022 and WeMakePrice in May 2023. It reportedly dismantled their financial and technology development teams, transferring these functions to subsidiary Qoo10 Technology.
In Tmon, all three officials involved in processing the borrowing plan before it reached the CEO were from Qoo10 Technology.
At a National Assembly committee session Tuesday, Tmon CEO Ryu claimed he was unaware of the company's financial issues.
At the same hearing, Qoo10 CEO Ku admitted he temporarily used 400 billion won from Tmon and WeMakePrice to finance the Wish acquisition. He said the funds were repaid within a month and are unrelated to recent settlement delays.
Prosecutors and police launched a criminal investigation this week after affected consumers filed a complaint against Ku and local subsidiary executives on charges of fraud, embezzlement and breach of trust.
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