Government provides over $405.1 million in liquidity for TMON and WeMakePrice incident

Victims of payment delays at TMON and WeMakePrice protest outside Qoo10’s headquarters in Gangnam District, Seoul, on July 28. Yonhap

The government has decided to allocate at least 560 billion won ($405.1 million) in funds to support small merchants suffering from payment delays from e-commerce platforms TMON and WeMakePrice, the Finance Ministry said on Monday.

The two Korean marketplaces are in crisis after being unable to pay their suppliers due to liquidity problems of their owner, Singapore-based Qoo10, which are said to have been caused by aggressive merger agreements.

Their unpaid bills amounted to about 210 billion won, and the amount is feared to rise further, the ministry said.

During an extraordinary meeting of a government-wide task force, the government decided to provide 200 billion won in public funds and another 300 billion won in loan guarantees to small traders.

According to the ministry, an additional 60 billion won is available for travel agencies that are particularly affected by the payment delays.

The government has also unveiled a series of support measures for sellers, including extending tax payment deadlines and helping them find new business channels.

“The two companies must take responsibility for the default. But the government has decided to expand 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 at TMON and WeMakePrice wait for refunds outside TMON’s headquarters in Gangnam district, Seoul, on July 25. Yonhap

According to the Financial Services Commission (FSC), Qoo10 has notified Korean financial authorities that it plans to raise $50 million in August to resolve the incident.

The financial supervisory authority had previously stated that the amount was not sufficient.

Qoo10 CEO Ku Young-bae apologized for the incident on Monday and vowed to respond quickly and mobilize all resources, including his company shares and other personal assets.

Qoo10 was founded by Ku in 2010 and acquired TMON in 2022 and WeMakePrice last year.

Due to the payment delays, South Korean regulators launched an investigation into the two companies and subsequently received complaints from customers.

The government promised to initiate collective dispute resolution procedures for the victims and support them in their possible civil lawsuits against the marketplaces. (Yonhap)