The police have launched a raid on BALAAN, an online luxury goods platform, amid a controversy over unsettled sales proceeds.
On the 4th, the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency announced that they conducted a second day of searches at the headquarters of BALAAN in Gangnam and the home of CEO Choi Hyung-rok. The police reportedly secured internal documents related to company operations and digital data through the search.
The police plan to investigate company officials, including CEO Choi, as soon as the analysis of the seized items is concluded.
Founded in 2015, BALAAN was once valued at 300 billion won in 2022, but settlements with some vendors were delayed starting March 24, and all payment services were suspended on the 28th. Recently, with poor sales continuing, the company's value has fallen to approximately 30 billion won, about one-tenth of its previous valuation.
On March 31st, BALAAN applied for corporate rehabilitation procedures at the Seoul Bankruptcy Court. Affected sellers filed complaints with the police against CEO Choi, Chief Strategy Officer Choi Soo-yeon, and Chief Operating Officer Choi Hyung-jun for fraud, embezzlement, and breach of trust. In April, BALAAN received permission from the Seoul Bankruptcy Court for M&A efforts before approval of its rehabilitation plan, and in May, selected Samil as the lead manager for the merger and acquisition.