T-Mef's 'Surprise' Corporate Rehabilitation Filing... Allegations of Koo Young-bae Scapegoating

"Will Liquidate Personal Stockpile" Declares on Same Day as Corporate Rehabilitation Filing
Tmon and Wemakeprice Cut Losses, Possibility of Saving Qoo10
Gu Young-bae Scheduled to Attend National Assembly Current Issues Inquiry on 30th Afternoon

Tmon and Wemakeprice, which are experiencing a large-scale settlement delay crisis, applied for corporate rehabilitation at the court on the 29th, triggering a strong backlash. Primarily, once the corporate rehabilitation process begins and debts are frozen, there could be victims who do not receive their sales proceeds. On the same day that Koo Young-bae, CEO of Qoo10, declared he would use his personal funds to minimize the damage, the decision to apply for corporate rehabilitation was made, raising criticism that the parent company Qoo10 intended to save itself first and cut ties with Tmon and Wemakeprice rather than resolving the problem from the start.

On the 30th at 2 p.m., Koo Young-bae, CEO of Qoo10, will appear before the National Assembly's Political Affairs Committee for an emergency inquiry regarding the unsettled payment crisis of Tmon and Wemakeprice, along with Ryu Kwang-jin, CEO of Tmon, and Ryu Hwa-hyun, CEO of Wemakeprice. This will be Koo's first public appearance since the crisis began.

In a statement released the previous day, Koo said that to secure urgent liquidity for Tmon and Wemakeprice, Qoo10 is promoting the inflow of overseas funds held by Qoo10 and the inflow of new funds through the disposal and collateralization of Qoo10 shares. However, if corporate rehabilitation is decided, this promise could become empty words. With the commencement of rehabilitation, all debt repayments are suspended, and some debts may eventually be forgiven. During this process, the court will hold the representatives of Tmon and Wemakeprice accountable for management responsibilities, but it is difficult to hold the major shareholder Qoo10 responsible. If the court judges that Tmon and Wemakeprice have no chance of rehabilitation and declares bankruptcy, Qoo10 will remain intact while only the two companies are liquidated. It is suggested that Koo may have drawn a ‘big picture’ to leave the problems only to Tmon and Wemakeprice and prevent the fire from spreading to the major shareholder Qoo10, choosing to apply for corporate rehabilitation after releasing the statement. Chae Hye-seon, a corporate rehabilitation expert and lawyer, explained, "The court conducts an examination of the representatives of companies applying for corporate rehabilitation, and if the major shareholder has done something wrong, it should be revealed during this process, but it is not an easy task."

On the 29th, as the 'unsettled payment issue' of Wemakeprice and Tmon continues, affected business owners gathered in the empty office at Wemakeprice headquarters on Yeongdong-daero, Gangnam-gu, Seoul. On the same day, Koo Young-bae, CEO of Qoo10, stated in a press release, "We will minimize consumer damage and prevent the spread of the situation through prompt response." Photo by Jo Yong-jun jun21@

Tmon and Wemakeprice stated that they will apply for the new Autonomous Restructuring Support program (ARS program) operated within the court’s rehabilitation system, aiming to review whether to actively pursue funding through restructuring funds rather than forced rehabilitation procedures. However, even in this case, it is necessary for Koo to take responsibility by securing liquidity through Qoo10 shares, but difficulties are expected at present. Koo holds 42.8% of Qoo10 shares and 29.4% of its logistics subsidiary Qxpress shares. Qoo10 has accumulated deficits reaching 430.4 billion KRW as of the end of 2021. Considering that Qoo10 acquired domestic e-commerce platforms by giving up shares, it was once recognized for its value in the market, but under the current circumstances, selling or collateral loans are expected to be difficult.

The application for corporate rehabilitation by Tmon and Wemakeprice has made sellers even more anxious. When entering corporate rehabilitation and debt repayment is temporarily suspended, transaction payments are also treated as debts, and settlements are halted. It becomes the responsibility of the creditors, the sellers, to prove that Koo and Qoo10 are at the core of this problem. Lawyer Chae said, "If the court finds that an investigation is necessary, that issue will be raised. Creditors must express their opinions by submitting statements."

Contrary to Koo’s plan to absolve Qoo10 from responsibility for the Tmon and Wemakeprice crisis, the industry views Qoo10 as the root cause of all problems. After acquiring Tmon and Wemakeprice, Qoo10 centralized development and financial functions in its subsidiary Qoo10 Technology. Then, it reportedly pressured the companies to meet sales volume targets, pushing them into a ‘reverse margin’ sales competition. The Federation of Small Business Owners, composed of small merchants on e-commerce platforms, stated, "Small business owners who suffered damages cannot even predict when or how much sales proceeds they will receive. Above all, small enterprises that cannot bear the damage from unsettled payments are highly likely to face a chain bankruptcy." They demanded, "Koo Young-bae, CEO of Qoo10, who holds fundamental responsibility for the Tmon and Wemakeprice sales payment settlement crisis, must immediately fulfill his promise to contribute personal funds for payment of sales proceeds."

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