Qoo10 applied on Thursday for the establishment of a new corporation, named KCCW (K-Commerce Center for World), with a paid-in capital of 999,999,900 won ($732,493) to push for the merger of the two companies.
Tmon and WeMakePrice are facing a financial crisis due to their failure since early July to settle payments with merchants on their platforms. Qoo10 CEO Koo Young-bae is suspected of diverting funds from these companies to support corporate acquisitions and efforts to list the logistics unit Qxpress on Nasdaq.
The government estimates that Tmon and WeMakePrice owe about 210 billion won in delayed payments to sellers, with some projections suggesting that total damages could exceed 1 trillion won.
On July 29, Tmon and WeMakePrice filed for corporate rehabilitation procedures with a Seoul court.
As the proposed merger of the two companies requires the court’s approval, Qoo10 is preparing for the integration through the new company and working on normalizing operations.
Qoo10 plans to write off its stakes in Tmon and WeMakePrice through capital reduction with stakeholder consent, and CEO Koo will place his entire 38 percent stake in Qoo10 into a blind trust managed by the new merged entity.
The company aims to make KCCW a holding company for the entire Qoo10 group and expand it into a global commerce platform, leveraging Qoo10’s networks across Asia, the U.S., Europe and India.
The company also intends to allow affected merchants from Tmon and WeMakePrice to participate in KCCW through a shareholder association structure.
KCCW has begun accepting letters of intent from sellers to convert unpaid balances into convertible bonds. It plans to form the first shareholder association by the end of this month and file for court approval of the merger.
"Selling Tmon or WeMakePrice alone will not suffice for damage recovery," Koo said. "We need to quickly normalize operations by drastically reducing costs and restructuring businesses for profitability through the merger."
He added that the integration would position the combined entity as the fourth-largest e-commerce player in Korea, reviving corporate value to attract investments and pursue mergers and acquisitions.
