SEOUL — On Friday, the Seoul Bankruptcy Court allowed e-commerce giants TMON and WeMakePrice one month to independently restructure their debts. This decision comes after the companies failed to make payments to their vendors, with outstanding debts estimated at approximately 274 billion won (US$200 million).
According to Yonhap News Agency, TMON and WeMakePrice will use this one-month period to negotiate voluntarily with their creditors to reschedule their debts. This move temporarily halts the court's decision on whether to enforce a formal debt restructuring process. The court noted that this autonomous restructuring support (ARS) period might be extended by up to three months, depending on the progress made with creditors.
The firms have come under scrutiny for continuing business transactions despite knowing they could not meet their financial obligations to vendors due to liquidity issues. If they fail to reach an agreement with creditors during this period, they could face a court-led rehabilitation procedure. Meanwhile, the court also announced plans for a consultation session on August 13, involving government and related organizations, aimed at minimizing the impact on small merchants affected by the platforms' financial troubles.
In a related development, prosecutors have intensified their investigation into the companies’ financial practices. They questioned the financial chief of Qoo10, the parent company of both platforms, suspecting involvement in delayed payments and possibly fraudulent activities. Qoo10 has been accused of misusing 40 billion won from TMON and WeMakePrice to acquire another shopping platform, Wish, despite knowing the subsidiaries were financially incapable of paying their vendors.
Prosecutors are also investigating a potential Ponzi-like scheme used by the parent company to manage payments. Searches were conducted at the offices of Qoo10 Technology, TMON, and WeMakePrice for the second consecutive day as part of efforts to trace the mismanaged funds.