Fintech founder Joe Cho charged with fraud in South Korea
Singapore
JOE CHO SEUNGHYUN, the founder of Marvelstone Group - a fintech firm once based in Singapore - has been charged with fraud in his home country of South Korea and is set to appear in court in Seoul at his first hearing this Friday, a court document seen by The Business Times showed.
He continues to be investigated by the police over the same allegations of fraud brought on by a separate set of over 70 investors who have claimed that more than 10 billion Korean won (S$11.5 million) of investments are due to them, said their lawyer Noh Joohee. The first hearing on Friday pertains to investigations based on reports from a separate "dozen" of investors, Ms Noh told BT.
Her clients' case will eventually lead to trial at the same court, which will then decide if the two trials should be combined into one, or proceed separately, Ms Noh said via email.
Mr Cho, a Singapore permanent resident who made the rounds in Singapore's fintech scene a few years ago, was picked up by the South Korean police at the airport on Aug 25, having been sent back to South Korea from Indonesia following a request submitted by the South Korean police through Interpol. He was then detained by the authorities under a detention warrant issued by the South Korean court, BT reported in August.
The Business Times was the first to report in May that Mr Cho was embroiled in legal disputes in South Korea over claims of fund redemptions contractually due to investors but not paid. In May, the fintech group Marvelstone said in response to BT queries that there are "disputes" being handled by solicitors of the "various parties" in Seoul. Mr Cho is the chairman and founder of Marvelstone Group.
The allegations by investors that Marvelstone failed to pay promised investment returns came as it expanded into Singapore. In 2015, Mr Cho sent an email to the Singapore media, listing plans that included acquisitions of global financial institutions. He said he wanted to "develop" pension funds in Singapore and aimed for "the world's first fintech-driven financial group".
Marvelstone Group's unaudited financial documents as at end of 2017 showed trade payables totalling S$938,751 that include hundreds of thousands due to a few Singapore-based investors. The amount was double its trade receivables. The loss-making group booked consultancy income of S$64,510 as its main revenue stream and had a negative cashflow of S$71,828.
Marvelstone's fund company reported no assets under management from investors over its two years of being a Registered Fund Management Company, and has ceased being a regulated entity.
Mr Cho and his Singaporean wife Gina Heng - who co-founded Marvelstone Group - were also sued by Singapore property firm Hong Leong Holdings for breaching a licence agreement for Lattice80, a Singapore "not-for-profit" fintech hub opened by Marvelstone Group in 2016.
The Singapore property group charged that Mr Cho and the fintech group failed to deposit revenue receipts that should have gone into designated bank accounts.
Marvelstone Group has previously said it makes fintech investments and builds hubs in artificial intelligence and cryptocurrencies, with Mr Cho and his wife previously making appearances at international tech conferences as representatives of Marvelstone.
Despite the apparent lack of business activity and assets, Marvelstone had said Lattice80 was the world's largest fintech hub. It issued reports on fintech influencers.
