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![[Photo by News1]](https://wimg.mk.co.kr/news/cms/202407/30/news-p.v1.20240730.127dd28c61ab4953ae074dcf244c63dd_P1.jpg) Woes at two South Korean e-commerce platforms owned by Singapore-based Qoo10 Pte. Ltd are intensifying as the platforms on Monday filed for corporate rehabilitation in the Seoul Bankruptcy Court. The Singapore-based firm‘s founder promised to use his assets to help compensate affected customers and vendors.
Qoo10 Founder and Chief Executive Ku Young-bae stated he would use his own assets as one of his solutions to solve the liquidity crisis, while his other solutions include disposing of his Qoo10 assets and stakes or using them as collateral. However, many investment experts consider the sale options highly unlikely as other Qoo10 affiliates have already seen their corporate valuations decline significantly following the recent crisis.
TMON and WeMakePrice said the rehabilitation program they filed for, called Autonomous Restructuring Support or ARS, is a type of arbitration that allows small business creditors to be paid in the ordinary course of business. But critics warn that any failure in the process might make the platforms more vulnerable to bankruptcy, resulting in a total damage of 1 trillion won ($723 million) or more.
The ARS program is designed to engage restructuring professionals in a voluntary negotiation between debtors and creditors before the insolvent company goes into receivership. However, if a creditor or group of creditors holding more than two-thirds of the company’s says no to the ARS program, the company will end up falling into receivership.
Multiple sources familiar with the retail industry say the delayed bills the platform fails to pay their vendors could total 1 trillion won. The creditors are mostly the lenders of TMON and WeMakePrice, as well as credit card companies, payment gateways (PGs), and vendors who refunded customers.
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