'Timeff Incident' Gu Young-bae, Ryu Kwang-jin, Ryu Hwa-hyun and 7 Others Face Mass Trial

Regarding the 'Timon·Wemakeprice (Timemep) unsettled payment incident,' a total of 10 related individuals, including Koo Young-bae, CEO of Qoo10, Ryu Kwang-jin, CEO of Timon, and Ryu Hwa-hyun, CEO of Wemakeprice, have been collectively indicted.

Koo Young-bae, CEO of Qoo10. Photo by Jo Yong-jun

On the 11th, the Seoul Central District Prosecutors' Office Timon·Wemakeprice Incident Special Investigation Team (led by Lee Jun-dong, Head Prosecutor of Anti-Corruption Division 1) announced that they had non-custodially indicted a total of 10 people, including CEO Koo, on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust, embezzlement, fraud), among others. The prosecution had previously requested arrest warrants twice for CEOs Koo, Ryu Kwang-jin, and Ryu Hwa-hyun, but both were dismissed by the court. Therefore, the case was forwarded for trial without detention.

CEO Koo is accused of conspiring with CEOs Ryu Kwang-jin and Ryu Hwa-hyun to embezzle approximately 1.85 trillion KRW in Timon and Wemakeprice seller settlement payments through so-called 'circular borrowing,' and of embezzling 50 billion KRW of Timon and Wemakeprice gift certificate settlement funds under the pretext of acquiring a U.S. e-commerce company.

According to the prosecution, from July last year to July this year, CEO Koo and others are accused of causing a total loss of approximately 72.71 billion KRW to Timon, Wemakeprice, and Interpark Commerce through preferential transactions within affiliated companies to facilitate the Nasdaq listing of their logistics subsidiary, Qxpress. In particular, the prosecution viewed that CEO Koo deliberately planned to divert funds to secure capital for Qxpress's Nasdaq listing when Qoo10 faced financial difficulties, acquiring Timon and Wemakeprice, which were in a state of capital erosion, without capital. It was confirmed that settlement payments that should have been paid first to Timon and Wemakeprice sellers were diverted to Qoo10 for this purpose.

Furthermore, the prosecution believes that CEO Koo devised a fund diversion plan using domestic corporations to evade sanctions related to Singapore company law and domestic foreign exchange transaction laws, executing embezzlement and breach of trust crimes. Timon and Wemakeprice sold gift certificates and other items to secure settlement funds of 50 billion KRW, which were then transferred to subsidiaries in the form of loans and arbitrarily used as acquisition funds for a U.S. e-commerce company.

This continuous fund diversion and resulting 'circular borrowing' eventually reached its limit, leading to the current settlement insolvency incident. Approximately 330,000 victims suffered damages amounting to about 1.595 trillion KRW due to this incident. The prosecution confirmed a damage compensation plan with CEO Koo, but he failed to present a concrete plan and expressed that he had no personal assets to contribute for damage compensation, indicating no intention to restore damages.

The prosecution stated, "We will make every effort to maintain the prosecution so that the defendants receive punishment commensurate with their crimes."