TMON and WeMakePrice, e-commerce platforms of the Singapore-based Qoo10, filed for court receivership Monday, officials said, amid continuing liquidity woes due to the firms’ delays in repaying vendors operating on their platforms.
The two South Korean marketplaces have been in crisis after failing to make payments to their vendors amid the liquidity issues of their owner, Qoo10, reportedly due to aggressive merger deals.
Their unpaid bills came to around 210 billion won (US$151.7 million), and it is feared the amount will grow bigger, according to the government officials.
The platforms filed for court receivership with the Seoul Bankruptcy Court, determining that their financial condition had reached an irreparable state due to the crisis and subsequent outflows of vendors.
The court is expected to take about a week to decide whether to accept the request. If granted, it will place the platforms under court-led debt restructuring.
Up to 60,000 vendors, as well as credit card companies and online payme
nt platforms, are estimated to be affected by the payment delays.
“We exerted our utmost efforts with the determination to resolve the problem, but face limitations in overcoming the worsening cash flows due to suspended transactions and loss of users,” the companies said.
“We inevitably applied for (court receivership) as a means to minimize damage to users,” they noted.
The justice ministry shortly imposed an overseas travel ban on Qoo10 founder and Chief Executive Ku Young-bae and the heads of TMON and WeMakePrice, while the Seoul Central District Prosecutors Office set up a special investigation team to look into suspected irregularities related to the incident.
Source: Yonhap News Agency