SEOUL — TMON and WeMakePrice, prominent e-commerce platforms owned by Singapore-based Qoo10, have applied for court receivership, signaling escalating financial distress. The move comes as both platforms struggle with liquidity crises, primarily caused by their failure to pay vendors. The applications were submitted to the Seoul Bankruptcy Court, which is set to make a decision on the matter within a week.
According to Yonhap News Agency, the financial woes for these South Korean marketplaces stem from a series of aggressive merger activities by Qoo10, leading to substantial liquidity problems. These issues have culminated in the companies owing approximately 210 billion won (US$151.7 million) to their vendors, a figure that is projected to increase. The decision to seek court receivership was driven by the need to stabilize their deteriorating financial conditions and prevent further losses to vendors and other stakeholders.
The potential court intervention could lead to a structured debt restructuring under judicial oversight. This development affects a wide range of stakeholders, including around 60,000 vendors, various credit card companies, and online payment platforms. Company representatives have expressed their regret, noting their exhaustive efforts to rectify the situation were hindered by halted transactions and a declining user base, which precipitated the move to file for receivership as a strategy to mitigate further damages.
In response to the unfolding crisis, the justice ministry has imposed travel restrictions on Qoo10's founder and CEO, Ku Young-bae, and executives from TMON and WeMakePrice. Additionally, the Seoul Central District Prosecutors Office has established a special investigative team to probe suspected irregularities connected to these financial struggles.