TMON under due diligence to find investors: sources

South Korean e-commerce platform TMON is under due diligence to attract new investors amid a liquidity crisis, industry sources said Tuesday.

A local accounting company has been checking the financial status of TMON since Friday to see if the platform is in the position to lure investors, people familiar with the matter told Yonhap News Agency over the phone.

On July 29, TMON and WeMakePrice, two Korean e-commerce firms owned by Singapore-based Qoo10, filed for corporate rehabilitation in the Seoul Bankruptcy Court after failing to make payments to vendors using their platforms since early July.

The two platforms have been in a one-month autonomous restructuring support (ARS) program since Aug. 2, in which they can make self-rescue efforts to find investors to resolve overdue payments and other related issues.

The ARS program is part of the court’s corporate rehabilitation programs. If a company fails to come up with self-help plans that satisfy the court, the court puts it under a court-led debt rescheduling program.

Hoping to succeed in attracting investors, TMON is preparing its transaction settlement system to resume sales through its online marketplaces, a company spokesperson said.

“But the most urgent thing is that credit card companies need to allow customers to use their cards to purchase products from the platforms,” the spokesperson said.

The payment delays by the two platforms prompted local financial authorities to launch an investigation. The authorities estimated there are more than 1 trillion won of unpaid bills and other liquidity issues regarding the incident.

Early this month, Ku Young-bae, the South Korean founder and CEO of Qoo10, said Qoo10 began the process to merge the two platforms into a new business entity named the K-Commerce Center for World (KCCW) with an initial capital of 1 billion won (US$730,000).

Through the merger proposal, Ku said Qoo10 will cut its entire stakes in TMON and WeMakePrice, and he will place his entire 38 percent stake in Qoo10 under the control of the KCCW.

The merger plan requires approval from the bankruptcy court.

On Aug. 16, Interpark Commerce, another affiliate of Qoo10, also filed for the same ARS program due to liquidity issues.