Qoo10 CEO Reveals eCommerce Payment Crisis to Lawmakers.

Seoul, South Korea - The CEO of Qoo10, Ku Young-bae, faced intense questioning in a parliamentary hearing over payment delays at its subsidiaries TMON and WeMakePrice, revealing a series of financial missteps and management failures.

Ku admitted that the group could only mobilize up to US$80 billion ($58 million) to address the crisis but emphasized that this could not be immediately used for seller payments. 

The admission came during an emergency inquiry by the National Assembly's National Policy Committee into the delayed payments and refunds at TMON and WeMakePrice.

The payment delays, which began on July 8 at WeMakePrice, have left numerous sellers unpaid for their products.

Ku's appearance at the hearing marked his first public appearance since the crisis began 22 days ago.

In a startling revelation, Ku confirmed that payment delays could spread to other Qoo10 subsidiaries, including Interpark Commerce and AK Mall.

When asked about potential issues at AK Mall, Ku stated, "I understand there is a possibility."

The CEO acknowledged using funds from TMON and WeMakePrice in February to acquire Wish, a global online shopping mall based in North America and Europe. 

"We temporarily mobilized funds from TMON and WeMakePrice but repaid them within a month," Ku said,

Insisting this was unrelated to the current payment delay crisis.

Ku struggled to provide clear answers about the whereabouts of the settlement funds, stating, "As far as I know, there is no capital left in the company now." He admitted to being unable to estimate the amount of damages accurately.

The Financial Supervisory Service (FSS) has intensified its scrutiny of Qoo10's operations. 

FSS Governor Lee Bok-hyun revealed they had already requested a prosecution investigation due to "strong indications of illegality" found during their fund-tracking process.

"We've been focusing on tracking the funds since last week because there have been quite a few boy-who-cried-wolf-like behaviors in recent actions and statements," Lee said,

Hinting at potential criminal implications for the eCommerce group's management.

Ku attributed the financial troubles to accumulated losses and intensified e-commerce competition, particularly from Alibaba and Temu. 

He claimed that most of the funds were used for promotions due to price competition, leading committee members to criticize,

"Are you saying you spent KRW 1 trillion (US$ 0.72 billion) on promotion costs?"

TMON and WeMakePrice filed for court receivership on Monday, a day before the hearing. 

Ku expressed hope for a chance to normalize operations, stating,

"If given a slight opportunity, we can normalize, resolve, and fully recover the damages."

The crisis has raised concerns about the stability of South Korea's e-commerce sector and the effectiveness of current regulations in protecting sellers and consumers on these platforms.