Financial Authorities Criticized Over Tmon and Wemakeprice Incident... Lee Bok-hyun Admits "There Are Shortcomings"

"Regulatory System Challenges but Apologies"
Despite Signing Management Improvement Agreement, Criticism of Supervisory Lapses
"Supervisory Authorities Have Limitations Regarding Financial Conditions"
Financial Services Commission Considering Additional Measures Beyond Liquidity Actions

Financial authorities have continued to criticize the delayed settlement of sales proceeds by TMON and WEMAKEPRICE. Regarding the controversy over inadequate supervision, Lee Bok-hyun, Governor of the Financial Supervisory Service, responded that "there were shortcomings." Kim So-young, Vice Chairperson of the Financial Services Commission, stated that after liquidity resolution measures, additional actions will be prepared in consultation with related agencies.

At an emergency hearing of the National Assembly's Political Affairs Committee held on the 30th, Governor Lee responded to a question from Kim Hyun-jung, a member of the Democratic Party of Korea, asking whether there was any management negligence after TMON and WEMAKEPRICE, both in a state of capital erosion, signed a memorandum of understanding for business improvement. He said, "We requested that the outstanding amounts be managed separately and also made various requests to separately manage newly incoming funds."

He added, "In fact, although there were promises to handle each case, the implementation did not occur, and there were shortcomings."

Regarding the criticism from Yoo Dong-soo, a Democratic Party member, that supervision was inadequate despite knowing that TMON and WEMAKEPRICE were in capital erosion as PG companies under the Electronic Financial Supervisory Regulations, Governor Lee replied, "There were regulatory system difficulties, but I am sorry." In response to Yoo Young-ha's question that this incident is a typical type of Ponzi scheme and an embezzlement case, he said, "I deeply feel responsible and offer my apologies," adding, "I also apologize for making statements that evaded responsibility by blaming legislative deficiencies."

Lee Bok-hyun, Governor of the Financial Supervisory Service, is attending an emergency inquiry related to the 'Timon and Wemakeprice settlement and refund delay incident' held at the National Assembly's Political Affairs Committee on the 30th. Photo by Kim Hyun-min kimhyun81@

Criticism related to the business improvement agreement continued. Han Chang-min, a member of the Social Democratic Party, said, "The related companies had been in a state of capital erosion even before the incident occurred, but there was no follow-up management at all." Lee Jung-moon, a Democratic Party member, said that if the business improvement agreement had been properly observed, the Financial Supervisory Service could have prevented or minimized the incident in advance, adding, "Since there was also a demand to meet liquidity capital ratios, if it had been sufficiently checked, a serious incident could have been prevented."

Cho Seung-rae, a Democratic Party member, criticized, "TMON and WEMAKEPRICE continued to record deficits even after submitting business improvement plans," and said, "To prevent the situation from worsening, cooperative monitoring with related agencies was necessary, but failing to do so is incompetence."

Governor Lee said, "I apologize once again for not working thoroughly," but added, "It would be good for everyone to review to what extent supervisory authorities can regulate matters related to financial conditions on this occasion."

The Financial Services Commission announced that in addition to providing liquidity support exceeding 560 billion won to prevent damage caused by unsettled sales proceeds, it is also considering additional measures. In response to Han Chang-min's question that the support measures help liquidity but are only temporary fixes and not fundamental damage countermeasures, Vice Chairperson Kim So-young of the Financial Services Commission replied, "Liquidity was the most urgent issue, so we took action, and we plan to discuss with related ministries and agencies whether additional measures are needed and decide accordingly."

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