Ku Young-bae, founder and CEO of Qoo10 / Courtesy of Qoo10
By Lee Kyung-min
Emergency funds totaling $50 million (70 billion won) pledged by Ku Young-bae, founder and CEO of Qoo10, is hardly enough to resolve recent settlement failures of over 170 billion won incurred by its two beleaguered subsidiaries, TMON and WeMakePrice, according to financial regulators, Sunday.
The veracity of the Singapore-based firm is deeply questionable, given the unmet calls for the CEO to present a plan to address the issues faced by customers, including the potential liquidation of his personal assets. His whereabouts remain unknown despite the escalating crisis over the past week.
Although the authorities conducted inspections of the two subsidiaries last week, they appear to lack fundamental solutions. Instead, they have recommended that credit card companies and payment gateways handle customer refund requests, effectively passing the responsibility to financial transaction intermediaries, who are also facing their own issues.
Market watchers say the questionable financial profile of Qoo10 is tied closely to its newest subsidiary Wish, the receiver of 2.3 trillion won reportedly sourced from TMON and WeMakePrice sales income.
According to financial authorities, Qoo10 has submitted a plan to remit approximately $50 million through Wish, an e-commerce subsidiary that operates in the North American and European markets, by August.
Criticism lingers, since the parent firm has yet to provide details of how to facilitate the settlement process.
A total of 195 sellers on WeMakePrice registered 56.5 billion won in failed settlements as of July 22. The figure for 750 sellers on TMON came to 109.7 billion won.
The unsettled total will surge, because the July 22 figures only include records up to the end of May.
Financial authorities consider the 70 billion won plan to be completely unviable.
“Nothing concrete will be expected from this fiasco, unless Ku appears before the public to make an apology and come up with plans to recover customer losses,” a senior government official said.
Meanwhile, card companies and payment gateway firms are pressured to process requests for refunds and payment cancellations, following the government’s recommendations.
The government is also contemplating using funds from the state-run Industrial Bank of Korea or guarantees from the Korea Credit Guarantee Fund for emergency financing.
The Fair Trade Commission established a consumer complaint response team early Thursday at the Korea Consumer Agency. The team will assist consumers seeking redress in civil court.
Read More
