Gov't to provide over $405.1 mil. of liquidity for TMON, WeMakePrice incident
Victims of payment delays by TMON and WeMakePrice protest in front of the headqurters of Qoo10 in Gangnam District, Seoul, July 28. Yonhap
The government has decided to extend at least 560 billion won ($405.1 million) of funds to support small vendors suffering from payment delays by the e-commerce platforms TMON and WeMakePrice, the finance ministry said Monday.
The two Korean marketplaces have been in a crisis after failing to make payments to their vendors amid liquidity issues by their owner, Singapore-based Qoo10, reportedly due to aggressive merger deals.
Their unpaid bills came to around 210 billion won, and the amount is feared to grow bigger, according to the ministry.
During an emergency governmentwide task force meeting, the government decided to provide 200 billion won of funds from public institutions for small merchants and another 300 billion won of credit guarantee funds.
An additional 60 billion won will be available for travel agencies hit particularly hard by the payment delays, according to the ministry.
The government also presented a set of supportive measures for the sellers, which include the extension of tax payment deadlines and helping them find new business channels.
"The two companies must take responsibility for the payment failure. But the government decided to extend support for customers and sellers to minimize the damage by mobilizing all possible resources," First Vice Finance Minister Kim Beom-seok said during the meeting.
Victims of payment delays by TMON and WeMakePrice wait for the refund in front of the headqurters of TMON in Gangnam District, Seoul, July 25. Yonhap
Qoo10 has told Korean financial authorities that it plans to raise $50 million in August to address the incident, according to the Financial Services Commission (FSC).
The financial regulator earlier said the amount would not be sufficient.
Qoo10 chief Ku Young-bae apologized for the incident Monday and vowed to take swift responses by mobilizing all resources, including his shares in the company and other personal assets.
Qoo10 was founded in 2010 by Ku, and it acquired TMON in 2022 and WeMakePrice last year.
In the wake of the payment delays, South Korean regulators launched an investigation into the two firms and have been receiving complaints from customers.
The government vowed to begin procedures for the settlement of collective disputes for victims and to support them in their possible civil suits against the marketplaces. (Yonhap)