This compilation image shows Qoo10 CEO Ku Young-bae (left), TMON CEO Ryu Kwang-jin (center), and WeMakePrice CEO Ryu Hwa-hyun attending arrest warrant hearings at the Seoul Central District Court on Monday. (Yonhap)

A Seoul court again rejected an arrest warrant for Qoo10 CEO Ku Young-bae on Tuesday on fraud and embezzlement charges related to his e-commerce group's large-scale payment delays to vendors.

The Seoul Central District Court made the decision following a hearing Monday, saying there was "room for dispute" over whether the allegations constitute a crime and no evidence suggesting Ku attempted to flee or destroy evidence since a previous request for an arrest warrant was rejected last month.

The court also denied arrest warrants for Ryu Kwang-jin and Ryu Hwa-hyun, the CEOs of Qoo10's e-commerce subsidiaries TMON and WeMakePrice, respectively, on similar grounds. Both are accused of involvement in the massive insolvency incident.

"Considering all the evidence collected until now, the defendant's claims, the progress of the investigation, and the defendant's career and social network, there does not appear to be a risk of destroying evidence or fleeing that differs from (the reason for) the previous warrant's rejection," the court said of Ku.

In late July, TMON and WeMakePrice filed for corporate rehabilitation with the Seoul Bankruptcy Court after failing to make payments to vendors using their platforms, resulting in over 1.5 trillion won ($1.1 billion) in overdue payments.

Prosecutors launched an investigation, accusing the corporate heads of defrauding vendors by allowing them to continue to do business on their platforms despite knowing they could not make remittances.

The CEOs are also accused of causing nearly 70 billion won of losses to TMON and WeMakePrice by funneling orders to another Qoo10 subsidiary, Qxpress, and embezzling 67.1 billion won from TMON and WeMakePrice to finance the parent firm's takeover of the American online e-commerce platform Wish.

The prosecution sought arrest warrants for the three CEOs last month, but the court dismissed them, saying the charges were disputable.

Ku has denied the charges against him, saying it is common for e-commerce platforms to try to increase sales despite losses.

The other corporate heads have claimed most of the problematic decisions were made solely by Ku and have denied their involvement in the process. (Yonhap)