'Refund Suspension' MergePlus CEO Siblings Appeal Against First Trial Verdict

1st Trial Court Sentences CEO Kwon Namhee to 4 Years Imprisonment
CSO Kwon Bogun Sentenced to 8 Years Imprisonment

Amid concerns over significant losses for many affiliated individual business owners, excluding large retail corporations prepared for compensation due to the massive refund crisis of the payment platform Merge Point, the headquarters of 'Merge Point' in Yeongdeungpo-gu, Seoul, on the 18th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Yoo Byung-don] The sibling executives of Merge Plus, the operator of 'Merge Point' which caused damage worth thousands of billions of won due to a refund suspension incident, have appealed the first trial verdict.

According to the Seoul Southern District Court on the 15th, Kwon Nam-hee (38), CEO of Merge Plus, who was prosecuted for violating the Electronic Financial Transactions Act, fraud, and embezzlement, along with his younger brother Kwon Bo-gun, Chief Strategy Officer (CSO, 35), and Kwon Mo, CEO of Merge Support (36), submitted an appeal to the Criminal Division 11 (Chief Judge Sung Bo-gi) yesterday.

They were indicted on charges of fraud for selling Merge Money worth 252.1 billion won to 570,000 consumers despite the company accumulating deficits and facing a business suspension crisis from May 2020 to August last year.

They are also charged with violating the Electronic Financial Transactions Act for issuing and managing Merge Money, a prepaid electronic payment method, without registration with the Financial Services Commission from January 2020, and for operating electronic payment agency services targeting users of the 'VIP subscription service' offering a 20% discount payment from June of the same year.

CSO Kwon also faces charges of breach of trust under the Act on the Aggravated Punishment of Specific Crimes and was identified by the prosecution as the actual mastermind at the time of indictment.

Merge Plus gained popularity by promoting Merge Money as prepaid funds usable like cash and offering a '20% discount.' However, in August last year, major franchise stores such as convenience stores and large supermarkets terminated contracts, triggering a large-scale refund crisis. Hundreds of subscribers demanding refunds gathered at Merge Plus headquarters in Yeongdeungpo-gu, Seoul.

At the time of indictment in January this year, the prosecution estimated the actual damage at 75.1 billion won and the damage to Merge Point affiliates at 25.3 billion won.

The court sentenced CEO Kwon Nam-hee to four years in prison and CSO Kwon Bo-gun to eight years in prison. Another brother, CEO Kwon Mo, was sentenced to two years and six months in prison with a four-year probation. Merge Plus as a corporation was fined 10 million won.

Additionally, the court ordered CSO Kwon Bo-gun to pay a fine of approximately 5.33165 billion won and CEO Kwon Mo to pay 716.157593 million won in confiscation. In the case of CEO Kwon Mo, the court also ordered the confiscation of bonds that had been preserved before sentencing. Furthermore, all three were ordered to compensate damages.

This content was produced with the assistance of AI translation services.