TMEF Scandal: CEO Gu Young-bae Appears for Warrant Hearing... "Best Effort to Recover Damages if Released Without Detention"

Gu Young-bae, CEO of Qoo10 Group, and the management team, who are the key suspects in the large-scale unsettled payment incident involving TMON and WEMAKEPRICE, are at a crossroads regarding detention.

Gu Young-bae, CEO of Qoo10 and the key suspect in the unsettled payment issue of TMON and WEMAKEPRICE, is attending the warrant hearing held on the 18th at the Seoul Central District Court in Seocho-gu, Seoul. Photo by Jo Yong-jun

Nam Cheon-gyu, the judge in charge of warrants at the Seoul Central District Court, is conducting a pre-arrest interrogation (warrant substantive examination) of CEO Gu, who is accused of fraud, embezzlement, and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, starting at 10 a.m. on the 18th.

Substantive examinations for warrants for CEO Ryu Kwang-jin and CEO Ryu Hwa-hyun are also scheduled to be held sequentially at 11 a.m. and 2 p.m.

Arriving at the court around 9:40 a.m. that day, CEO Gu said, “I sincerely apologize to the customers, sellers, and many others who have been harmed by this incident,” adding, “I clearly acknowledge my responsibility for this incident and deeply reflect on it.” He also stated, “If given the opportunity to remain free, I will do my utmost to restore the damages.”

CEO Gu and others are accused of continuing business operations by making payments to tenant companies in a Ponzi-like manner despite being aware of the inability to pay settlement funds, thereby embezzling a total of approximately 1.595 trillion won (fraud). They are also accused of causing a total loss of 72 billion won to TMON, WEMAKEPRICE, and Interpark Commerce through preferential transactions within affiliated companies, and embezzling 79.9 billion won of funds from TMON, WEMAKEPRICE, and Interpark Commerce for the acquisition payment of the U.S. e-commerce company ‘Wish’.

Previously, the prosecution requested arrest warrants for CEO Gu and two others, but the court dismissed the warrants on the 10th of last month, stating, “Considering the nature of the e-commerce platform business, there is room for dispute regarding the charges.”

Accordingly, the prosecution conducted supplementary investigations and re-requested the arrest warrants on the 14th. Unlike the previous warrant request, this time the charges related to Interpark Commerce were added, increasing the amount of breach of trust by about 2.8 billion won and embezzlement by about 12.8 billion won.

The decision on whether to detain them is expected to be made as early as this afternoon.