CEOs of troubled TMON and WeMakePrice questioned over massive payment delays

Prosecutors questioned the CEOs of e-commerce companies TMON and WeMakePrice on Thursday as part of an investigation into massive delays in payments to suppliers on their platforms.

TMON CEO Ryu Kwang-jin and WeMakePrice CEO Ryu Hwa-hyun appeared for questioning at the Seoul Central District Public Prosecutor’s Office on suspicion of embezzlement, fraud and other illegal acts.

In late July, Singapore-based Qoo10’s e-commerce platforms filed for bankruptcy in court amid liquidity issues that led to massive delays in payments to suppliers on its platforms.

The government estimates that the outstanding payments amount to 1.28 trillion won (US$959.6 million), affecting about 48,000 merchants.

Prosecutors have since launched an investigation, accusing the CEOs of helping parent company Qoo10 embezzle 50 billion won from corporate funds from TMON and WeMakePrice to finance the acquisition of US online e-commerce platform Wish.

They allegedly misled sellers to continue doing business on their platforms even though payments to sellers could not be made as expected.

TMON’s CEO told the press before the hearing that he had not seen any previous signs of possible payment delays. He also denied any involvement in Qoo10’s acquisition of Wish.

After Thursday’s hearing, prosecutors are expected to soon summon Qoo10 CEO Ku Young-bae for questioning. (Yonhap)