Qoo10 CEO questioned in e-commerce fraud probe

By Kim Joo-heon Posted : September 30, 2024, 11:14 Updated : September 30, 2024, 11:14
Qoo10 CEO Koo Young-bae arrives at his home on Aug. 1, 2024, as the prosecutors carry out a search and seizure operation. Yonhap
SEOUL, September 30 (AJP) -- The prosecution investigating a payment delay scandal involving e-commerce platforms Tmon and WeMakePrice on Monday questioned the chief executive officer of their Singapore-based parent company, Qoo10 Group.

The two Korean firms have been embroiled in a financial crisis since July, unable to settle payments with merchants on their platforms.

Qoo10 CEO Koo Young-bae is suspected of diverting funds from the companies to assist with corporate acquisitions and the listing of its logistics unit, Qxpress, on Nasdaq.

The Seoul Central District Prosecutors' Office summoned Koo as a suspect on charges of fraud, embezzlement and breach of trust.

"I will sincerely undergo the investigation," Koo told reporters as he entered the prosecution office in the morning.

Prosecutors are expected to focus on whether Koo misused affiliate funds by consolidating finance teams into Qoo10 Technology, participated in a Ponzi-like operation despite the worsening financial situation and issued direct orders during the process.

He is suspected of involvement in 1.4 trillion won of fraud and 50 billion won of embezzlement.

The prosecution suspects that Tmon and WeMakePrice used about 50 billion won of settlement payments owed to sellers to fund Qoo10's acquisition of the overseas shopping platform Wish.

They also believe the companies engaged in fraudulent operations by continuing to sell discounted gift cards even when they were unable to make payments to sellers.

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