Search and Seizure of Residence on Charges of Fraud and Embezzlement
Prosecutors have launched additional raids on Kim Hyo-jong, CEO of Qoo10 Technology, and other Qoo10 Group officials involved in the 'Timon-Wemakeprice (Timemep) incident.'
According to the legal community on the 26th, the Timemep task force team (led by Chief Prosecutor Lee Joon-dong) of the Seoul Central District Prosecutors' Office conducted raids on four residences of four executives from Timon and Wemakeprice on charges of fraud and embezzlement.
The raid targets included CEO Kim of Qoo10 Technology, a technology subsidiary of Qoo10. Qoo10 Technology functions as a kind of 'control tower,' overseeing finance and legal affairs for domestic shopping platforms Timon, Wemakeprice, and Interpark Commerce. CEO Kim also serves as an auditor for Timon and an inside director for Wemakeprice.
The other three individuals targeted in the raids are reported to be a former head of Timon's management support division, a former head of the partnership business division, and a director-level executive at Wemakeprice.
From the 1st to the 3rd of this month, prosecutors simultaneously raided the residences of Koo Young-bae, CEO of Qoo10 Group; Ryu Kwang-jin, CEO of Timon; and Ryu Hwa-hyun, co-CEO of Wemakeprice, as well as Timon's headquarters and Wemakeprice's office building. The raids on this day targeted other executives excluding these individuals.
The search warrants reportedly cited fraud amounting to approximately 1.4 trillion KRW and embezzlement of around 40 billion KRW.
Prosecutors judged that if Timon and Wemakeprice continued operations by using sales proceeds in a circular manner amid severe financial crises, it could constitute fraud. Furthermore, if sales proceeds that should have been paid to sellers were taken out of the company and used as acquisition funds for other Qoo10 group companies, it could be considered embezzlement or breach of trust.
As prosecutors proceed with additional compulsory investigations into other related parties, the investigation into the Timemep incident is expected to expand. The amount involved in fraud and embezzlement charges may also increase. Based on the secured materials, prosecutors are expected to analyze the flow of funds among related corporations such as Timon, Wemakeprice, and Qoo10, while also thoroughly examining key decision-making processes through executives' phone calls and emails.
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