‘Timef Incident’ Gu Young-bae Faces 20 Billion Won Wage Arrears Allegation... At Risk of Arrest

Allegations of Violations of the Labor Standards Act and the Employee Retirement Benefit Security Act

Gu Young-bae, CEO of Qoo10 Group, who is facing charges of fraud, embezzlement, and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes in connection with the large-scale unsettled payment incident involving TMON and WEMAKEPRICE, is once again on the verge of being detained for allegedly withholding a large amount of wages and severance pay.

Gu Young-bae, CEO of Qoo10 Group, identified as the key suspect who triggered the large-scale unpaid settlement incident at Tmon and Wemakeprice, is attending the pre-arrest suspect interrogation held at the Seoul Central District Court in Seocho-gu, Seoul, last October. Photo by Kang Jin-hyung aymsdream@

According to the Ministry of Employment and Labor on the 18th, last week, the Public Investigation Division 3 of the Seoul Central District Prosecutors' Office (Chief Kim Tae-hoon) requested an arrest warrant for CEO Gu at the request of the Gangnam branch of the Seoul Regional Employment and Labor Office, which has been investigating him.

CEO Gu is accused of failing to pay approximately 20 billion KRW in wages and severance pay to employees of subsidiaries and affiliates.

In October, 51 former employees of Qoo10 Tech filed a complaint with the Ministry of Employment and Labor, alleging that CEO Gu and Kim Hyo-jong, CEO of Qoo10 Technology, violated the Labor Standards Act and the Act on the Guarantee of Employees' Retirement Benefits by not paying wages and severance pay.

CEO Gu, along with Ryu Kwang-jin, CEO of TMON, and Ryu Hwa-hyun, CEO of WEMAKEPRICE, was indicted without detention on the 11th of this month on charges of breach of trust, embezzlement, and fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. They are accused of conspiring to embezzle approximately 1.85 trillion KRW in settlement payments owed to sellers on TMON and WEMAKEPRICE, as well as embezzling 50 billion KRW in settlement payments for gift certificates from TMON and WEMAKEPRICE under the pretext of acquiring a U.S. e-commerce company.

There are also allegations that QooExpress, a logistics subsidiary of Qoo10, caused a total loss of 72.7 billion KRW to TMON, WEMAKEPRICE, and Interpark Commerce by funneling affiliate work to prepare for a Nasdaq listing.

This is the third time an arrest warrant has been requested for CEO Gu.