Gu Gyeong-bae: "The accumulated deficit of 1 trillion won was used for company operations and promotions" (Comprehensive)

Attendance at the National Assembly's
Committee on Economy on the 30th
"Interpark and AK Mall may also face settlement delays"
"Integrating Tmon and Wemakeprice and operating for 6 months can resolve the issue"

Gu Young-bae, CEO of Qoo10 and the person responsible for the unsettled payment crisis involving TMON and WEMAKEPRICE, expressed his intention to merge TMON and WEMAKEPRICE to continue operations at the National Assembly. On the 30th, he appeared at the National Assembly's Political Affairs Committee inquiry on the unsettled payment crisis of TMON and WEMAKEPRICE and claimed, "The only way to recover the damage is to merge TMON and WEMAKEPRICE and improve the profit structure."

This was the first time in 22 days since the payment delay crisis began at WEMAKEPRICE on the 8th that CEO Gu appeared in public.

Koo Young-bae, CEO of Qoo10 Group, is speaking at the urgent inquiry on the 'Timon and Wemakeprice settlement and refund delay incident' held on the 30th at the National Assembly's Political Affairs Committee. Photo by Hyunmin Kim kimhyun81@

"Available Funds of 80 Billion KRW"

When asked how much funds the group could mobilize for damage recovery and how much personal funds he had, CEO Gu said, "The group can mobilize 80 billion KRW," but added, "I am not sure if all of this can be invested." He stated, "I have invested everything I have into the company," and explained, "When the company’s stock value was doing well, it was valued at up to 500 billion KRW, but after this crisis, the shares were pledged..." trailing off. He continued, "I hold 38% of Qoo10 shares. I will put everything I have on the table."

Regarding the whereabouts of the accumulated unsettled payments estimated at around 1 trillion KRW for TMON and WEMAKEPRICE, he explained, "About 60% of that was already accumulated deficit when Qoo10 acquired the two companies, and the rest was used for payments to sellers and promotions," denying any concealment of funds or embezzlement. However, lawmakers demanded that the Financial Supervisory Service and others investigate the whereabouts, suspecting CEO Gu had hidden the money.

CEO Gu also admitted to using TMON and WEMAKEPRICE funds for the acquisition of a North American and European-based global online shopping mall in February. When asked where the acquisition funds came from, he said, "400 billion KRW was paid in cash, and temporarily TMON and WEMAKEPRICE funds were also mobilized for that money," adding, "However, it was repaid within a month."

Ruling and opposition party lawmakers criticized CEO Gu for applying for emergency corporate rehabilitation at the court just six hours after saying he would repay the unsettled payments by using his personal funds. In a statement released the previous morning, CEO Gu apologized deeply to customers, partners, and the public affected by the crisis, promising to minimize customer damage and prevent further spread through swift action. Later that day, TMON and WEMAKEPRICE abruptly filed for corporate rehabilitation. CEO Gu said, "Immediately after the statement, the CEOs of TMON and WEMAKEPRICE strongly insisted that the problem could not be solved without rehabilitation, so the application was made. This does not mean I have reversed my position on resolving the issue by contributing personal assets."

Regarding this, Ryu Hyun-hwa, CEO of WEMAKEPRICE, explained, "The rehabilitation application was made because there were too many provisional seizures and lawsuits, making normal site operations impossible."

Unsettled Payments Not Fully Identified... At Least 210 Billion KRW

Regarding questions about unsettled sales payments, Ryu Kwang-jin, CEO of TMON, said, "There are 2,081 companies with delayed settlements, and the amount is estimated at 138.4 billion KRW," adding, "The damage amount that may occur afterward has not been accurately calculated yet, and we are continuing to compile it in consultation with the Financial Supervisory Service."

CEO Ryu Hwa-hyun said, "There are 659 companies with delayed settlements, and the amount is 88 billion KRW," explaining, "The settlement amounts for June and July are also under detailed investigation by the Financial Supervisory Service, just like TMON." When lawmakers criticized that even after more than a week since the crisis began, the unsettled amounts were not properly identified, CEO Gu responded, "I have not been briefed on fund management," and added, "The financial flow is comprehensively overseen by the head of the finance department."

Additionally, CEO Gu mentioned that Qoo10 affiliates Interpark Commerce and AK Mall might also face settlement delays following TMON and WEMAKEPRICE. When asked if there was a possibility that Interpark Commerce and AK Mall would fail or delay settlements, he answered, "I understand there is such a possibility."

"Give Me Just Six Months"

During a break in the Political Affairs Committee, CEO Gu told reporters that he could resolve the crisis if given six months. When asked if he believed 100% of the damage could be compensated, he said, "It is not easy, but considering the characteristics of e-commerce, it can quickly recover," adding, "If we persuade people well with this content, opportunities can open up, and I am confident. This is not to buy time." He continued, "I accept all criticism and will naturally accept legal punishment, including criminal penalties. However, I need some time; I am not asking for three years. Just give me six months, and if you help me get back on track a little, I will devote myself to this as if my life depends on it."

CEO Gu explained that the deficits of TMON and WEMAKEPRICE stemmed from competition with other e-commerce rivals. He emphasized, "AliExpress, Temu, and Coupang are fiercely competing in business," and added, "Promotion costs should be shared, but we have been operating under a structure where we bear them alone, which has accumulated over time."

In the resumed questioning after the break, when asked about specific plans for damage recovery, CEO Gu insisted, "The only way is to merge TMON and WEMAKEPRICE to improve the profit structure and normalize operations."

The WEMAKEPRICE and TMON crisis erupted on the 8th when WEMAKEPRICE delayed payment settlements to its marketplace sellers. The government estimates the unsettled amount for TMON and WEMAKEPRICE at about 210 billion KRW. This figure is as of the end of May, and the amount is expected to increase significantly when including unsettled payments for June and July.

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