Timon and Wemakeprice Questions Continue at National Assembly's Political Affairs Committee... Lee Bok-hyun Apologizes on Behalf of Authorities (Comprehensive)

Financial Supervisory Service Conducts Emergency On-Site Inspection of Tmon and Wemakeprice
"Settlement Delays to Be Managed Starting This Month"

As the delay in seller settlements involving Timon and Wemakeprice, subsidiaries of the Singapore-based e-commerce platform Qoo10, unfolds, members of the National Assembly's Standing Committee on Financial Services and Trade have continued their inquiries. Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), representing the financial authorities, expressed apologies and stated that monitoring of the situation has been intensified, with inspection personnel dispatched to conduct on-site checks.

On the 25th, following the National Assembly's Financial Services Committee briefing, Governor Lee responded to concerns that the Timon and Wemakeprice incident could escalate into a second Merge Point scandal by saying, "We have sent an inspection team composed of six personnel to conduct on-site inspections," adding, "We are verifying whether the figures reported by the related companies are appropriate."

Regarding whether the Electronic Financial Transactions Act, which mandates separate management of prepaid funds, was properly followed, he said, "Although it is scheduled to be enforced starting this September, it has been managed in a supervisory manner beforehand," and added, "We do not expect consumer damages to spread in this regard."

Concerning the fact that concerns about settlement delays at Qoo10, which owns both companies, had existed for a year, he replied that a management improvement agreement had been in place to oversee the situation. Governor Lee explained, "Since June 2022, intensified competition within the industry worsened capital ratios and financial conditions, and we have managed this through a management improvement agreement," adding, "The issue of delayed settlements to vendors has been specifically managed since this month."

He continued, "I understand that extensions of settlement periods under the agreement proceeded normally," and added, "Delays occurring outside the scope of the agreement are known to have started from July."

[Image source=Yonhap News]

In response to People Power Party lawmaker Kim Jae-seop's criticism that the FSS, which promised to prevent a recurrence during the Merge Point incident, bears responsibility for the current situation, Governor Lee said, "Regardless of the reasons, I would like to apologize on behalf of the authorities for causing burden and concern to the public."

The Financial Services Commission (FSC) announced it is considering raising the guarantee limit for liability insurance that e-commerce operators must carry. In response to Democratic Party lawmaker Lee Jung-moon's point that the minimum required liability insurance of 200 million KRW under electronic financial supervision regulations does not keep pace with market size, Kim So-young, Vice Chairman of the FSC, said, "We will actively consider this."

Questions regarding the relocation of KDB Industrial Bank to Busan also followed. Social Democratic Party lawmaker Han Chang-min asked, "After Chairman Kang Seok-hoon took office in 2022, the organization was restructured, and some parts were sent to Busan. There is controversy over whether they should remain at the head office according to the organizational chart." Kang Seok-hoon, Chairman of the Industrial Bank, replied, "We confirmed that it complies with regulations before sending them down." He further explained the rationale for the Busan move, stating, "We are diligently carrying out national tasks not only for balanced national development but also to make the Southeast region a new growth engine."

Meanwhile, the personnel hearing report for Kim Byung-hwan, nominee for the Financial Services Commission, was postponed again on this day following the previous day's delay. Yoon Han-hong, Chairman of the National Assembly's Financial Services Committee, said, "Since consensus among members has not been reached, we decided not to submit it today."