Prosecutors raided e-commerce platforms TMON, WeMakePrice, and Qoo10 CEO Ku Young-bae on August 1, charging them with fraud amounting to 1 trillion won ($730 million) and embezzlement of 40 billion won.
South Korea’s Supreme Prosecutors’ Office said they conducted raids on three residences of company executives, including Ku, and seven corporate offices, including the headquarters of TMON and WeMakePrice. The raids came six days after the Financial Supervisory Service requested an investigation into the payment delay issues involving the two e-commerce platforms.
The search warrants issued by prosecutors cite charges of embezzlement and fraud, according to investigations by ChosunBiz. Prosecutors allege that Koo embezzled 40 billion won from TMON and WeMakePrice, using the funds to acquire U.S. e-commerce company Wish.
Prosecutors also suspect that the e-commerce platforms defrauded consumers of more than 1 trillion won by selling gift certificates at unusually high discount rates even though the companies faced severe capital erosion.
