E-commerce platform Qoo10 to be wound up; liquidators appointed

SINGAPORE: Troubled e-commerce platform Qoo10 was ordered on Monday (Nov 11) by the Singapore High Court to be wound up, with liquidators also appointed for the company.

The Singapore-based Qoo10 has been mired in a debt scandal with vendors as well as businesses alleging payment delays while some parties turned to court to seek help.

One such party was Korea Culture Promotion (KCP), which operates culture portal sites and issues culture gift certificates and other products to serve their customers in South Korea.

According to court documents seen by CNA, KCP said that it was one of Qoo10’s many merchants “left high and dry”, with the embattled company and its South Korean subsidiaries owing over 76 billion won (US$54.4 million).

Nearly 6 billion won was allegedly owed by Qoo10 to KCP, which also alleged that Qoo10 refused to honour the guarantees provided to it to secure the liabilities of its two Korean subsidiaries, TMON and WeMakePrice. Qoo10’s liabilities under the guarantees were said to exceed 70 billion won.

Signs of trouble had first surfaced for Qoo10 in July when TMON and WeMakePrice failed to make payments to merchants using their platforms, prompting South Korean financial authorities to launch a probe.

The two platforms then filed for corporate rehabilitation in the Seoul Bankruptcy Court, and in October the court ruled that they be sold off to resolve the payment delays.

The Singapore High Court on Monday also allowed another creditor, 21st Century Healthcare, to replace KCP as the claimant.

According to court documents, 21st Century Healthcare is owed about S$954,000 by Qoo10. Other creditors include SCI Ecommerce, Shenzhen Lanmey Industries and Intrepid E-commerce services.

“There is an urgent need to empower a liquidator to conduct investigations into Qoo10’s affairs,” argued KCP’s lawyers in court documents.

“There are strong indications of wrongdoing by Qoo10’s management which had resulted in its financial woes.”

Between April and August, the Monetary Authority of Singapore (MAS) and other government agencies received several customer complaints against Qoo10 for delays in processing payments to customers, who are merchants on Qoo10's platform.

In early September, Qoo10 informed MAS that a significant number of merchants would face payment delays, prompting the authority to suspend its provision of all payment services in Singapore later that month.

MAS said the suspension does not prohibit Qoo10 from operating its e-commerce platform. However, there were at the time no alternative payment methods available on the platform so consumers would not be able to make any payments on the site.