Qxpress, the logistics subsidiary of Singapore’s Qoo10 Group, which includes TMON and WeMakePrice, is moving towards independence from its parent company, according to a report on Aug. 20. The company, a key part of the Qoo10 Group under CEO Ku Young-bae, was initially planned for a Nasdaq listing in the U.S. However, with little progress in addressing the TMON-WeMakePrice crisis and compensating its victims, Qxpress’s move has drawn criticism, with some viewing it as a strategic attempt to evade responsibility.
Qxpress was founded by Ku in Singapore in February 2011. The company has mainly operated in South Korea, Japan, and Southeast Asia, handling the delivery of transactions generated by the Qoo10 Group. Ku had envisioned a Nasdaq listing for Qxpress and focused on expanding the company’s size to meet the requirements for such a listing.
To demonstrate the scale necessary for a Nasdaq listing, Qoo10 Group acquired TMON, WeMakePrice (WMP), and North American e-commerce platform Wish. Both TMON and WeMakePrice are in a state of complete capital impairment, with liabilities exceeding assets. An industry insider said, “CEO Ku acquired a series of struggling e-commerce companies with poor performance and similar business models, likely to inflate the size of Qxpress for its listing.”
Ku’s plans hit a snag with the unresolved issues of the TMON-WeMakePrice scandal. As a result, the financial investors (FIs) who had initially supported Ku’s Nasdaq listing initiative for Qxpress began to turn away. Qxpress was jointly owned by Qoo10 and Ku, holding 66% and 29% of the shares, respectively. The problem is that FIs are demanding to convert their convertible bonds (CBs) and exchangeable bonds (EBs) into common stock, potentially reducing Ku and Qoo10 to minority shareholders while securing management control for the FIs. The move towards Qxpress’s independence from the Qoo10 Group appears to be a result of this situation.
FIs are expected to complete the conversion of Qxpress shares by the end of this month and seek new strategic investors (SIs). Qxpress has recently decided to abandon its Nasdaq listing plans and is considering a name change. The company aims to operate independently by focusing on external client sales. Qxpress has distanced itself from the TMON-WeMakePrice crisis, asserting in a July 27 press release that the settlement delays involving TMON and WeMakePrice are not directly related to Qxpress and have minimal impact on its business. Qxpress also replaced CEO Ku with Chief Financial Officer (CFO) Mark Lee and highlighted that 90% of its cargo is international. A seller affected by the crisis noted, “Since the scandal emerged, Qxpress has behaved as though it is unrelated to the situation.”
Victims of the TMON-WeMakePrice crisis are furious with the current developments. A cosmetics seller, who has not received hundreds of millions of won from WeMakePrice, said, “The self-rescue plan submitted to the court is unclear about how funds will be raised. We suspect that Qxpress’s move towards independence is intended to make securing funding even more difficult.”
