'Major Refund Suspension' Merge Point Scandal's Representative Siblings Sent to Prosecution in Custody

Amid concerns over significant losses for many affiliated individual business owners, excluding large retail corporations prepared for compensation due to the massive refund crisis of the payment platform Merge Point, the headquarters of 'Merge Point' in Yeongdeungpo-gu, Seoul, on the 18th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Donghoon Jeong] Kwon Namhee (37), CEO of Merge Plus, the operator of the prepaid discount service 'Merge Point' that caused a large-scale refund suspension incident, and his younger brother and co-founder Kwon Bogun (34) have been sent to prosecution in custody.

On the 17th, according to the police, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced that they had sent CEO Kwon Namhee and co-founder Kwon Bogun, who are accused of violating the Electronic Financial Transactions Act and fraud, to prosecution in custody. In addition, as a result of the investigation, Director Kwon Kanghyun, a former executive of Samsung Electronics, who was registered as a suspect, was judged not to be practically involved in the operation of Merge despite being the nominal representative, and was not sent to prosecution.

CEO Kwon and his brother Kwon are suspected of operating Merge Plus without registering as a prepaid electronic payment instrument issuer and manager as stipulated in the Electronic Financial Transactions Act since around February 2018. They are also accused of conducting electronic payment agency business without registration by recruiting some members through a prepaid method.

The police are known to have applied fraud charges, believing that the two sold cash-equivalent 'Merge Money' worth several hundred billion won in a so-called 'Ponzi scheme' manner. They are also accused of embezzling corporate funds worth tens of billions of won from Merge Plus and its affiliated companies.