[Edaily Marketin JI YEONG-EUI YunJi Kim Soyoung Park Reporters] Rep. A of the Policy and Finance Committee: “Chairman Kim Sang-jo of the Fair Trade Commission, there was an incident in which the conglomerate KT infringed on a startup’s trademark without authorization. (Omitted) E&B Soft reportedly saw its sales drop to one-eighth of their original level due to KT’s trademark infringement. I hope the Fair Trade Commission will thoroughly investigate the facts and, through a swift investigation, inform us of the results regarding allegations of trademark infringement or unfair competition.”

Kim Sang-jo, Chairman of the Fair Trade Commission: “We will look into it and get back to you.”

This exchange took place during the National Assembly’s Political Affairs Committee’s comprehensive parliamentary audit in October 2017. Former Representative A, who was a sitting member of the Political Affairs Committee at the time, raised the trademark dispute between E&B Soft and KT and requested an investigation by the Fair Trade Commission. On the surface, it appeared that a lawmaker was conveying a grievance from a startup embroiled in a dispute with a large corporation during the parliamentary audit.

However, the startup in question, E&B Soft, was not a company unrelated to former lawmaker A. Mr. Seol, former lawmaker A’s brother-in-law, had signed a consulting contract with E&B Soft to address the company’s management challenges, and Mr. Seol’s younger brother was also serving as a co-manager.

While it cannot be definitively concluded that the lawmaker’s questioning during the parliamentary audit was illegal, controversy remains over whether addressing an individual dispute involving a company with which he had a conflict of interest was consistent with the purpose or appropriateness of the audit.

Some have also pointed out that the management may have easily cleared the high bar of the parliamentary audit thanks to their close ties with the incumbent lawmaker.

The issue is that this startup, E&B Soft—the predecessor to “Cash Cow,” which was famous for its “receipt reward app”—is currently under investigation by prosecutors because its manager, Mr. Seol, is suspected of embezzling tens of billions of won in company funds, as well as committing breach of trust and tax evasion.

CashCow shareholders argue that the dispute between E&B Soft and KT, which was addressed during the 2017 parliamentary audit, played a role in Mr. Seol Mo’s expansion of management control.

CashCow, a well-known “reward app” company, embroiled in allegations of breach of trust, embezzlement, and tax evasion

According to an exclusive report by Edaily on the 20th, the Seongnam Branch of the Suwon District Prosecutors’ Office is investigating Mr. Seol, CEO of CashCow, on charges of embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. The police, who had previously investigated the related allegations, referred Mr. Seol to the prosecution last May on charges of violating the Act.

CashCow is also accused of manipulating sales figures by mobilizing business partners to exchange fraudulent tax invoices. Following a special tax audit of CashCow and its affiliated companies involved in sales transactions, the Central Regional Tax Office filed a complaint with the Anti-Corruption Investigation Unit of the Gyeonggi Southern Provincial Police Agency in November of last year on charges of tax evasion.

Mr. Seol is accused of pushing forward with the sale of Cash Cow’s core business without shareholder consent or due process and of receiving a deposit of 5 billion won. He was charged with transferring 2.2 billion won—out of the 5 billion won deposit, which was subject to return if the sale fell through—to his personal account, and with causing damage to the company by helping a specific investor with whom he had a close personal relationship recover 2 billion won.

Cash Cow shareholders and former executives who filed the complaint against CEO Seol claim that, in addition to the proceeds from the business sale received without shareholder consent, a significant amount of funds raised through investment were suspiciously diverted for purposes unrelated to company operations.

Sole Management of CashCow Following ‘Parliamentary Hearing Solicitation’… Allegations of Embezzlement and Breach of Trust Intensify

CEO Seol began co-managing the company with E&B Soft’s management in 2014, and E&B Soft changed its name to “CashCow” following a merger. During the transition from E&B Soft to Cash Cow, CEO Seol became the largest shareholder, holding approximately 22.3% of the shares, and also assumed the position of CEO. After Mr. Bae, who had been part of the joint management team, stepped down from management in 2021, key decision-making authority at the company became concentrated in CEO Seol’s hands. It was around this time that allegations of embezzlement and breach of trust began to surface, stemming from suspicions that company funds were being diverted in a suspicious manner.

Based on accounts from multiple Cash Cow shareholders, it appears that the reason CEO Seol—who was not the company’s founder—came to wield unparalleled influence over company management was due to “a successful request made during the 2017 National Assembly audit.” After personally asking former lawmaker A to address the dispute between E&B Soft and KT during the parliamentary audit—a request that was granted—CEO Seol was recognized as a figure with “extensive connections in political and business circles” capable of resolving the company’s management issues, thereby solidifying his position in corporate leadership.

CEO Seol acknowledged that he had previously sought assistance from former lawmaker A while resolving pressing company issues. However, he categorically denied allegations of tax evasion, breach of trust, and embezzlement.

He stated, “(Former Representative A) is my in-law. We have a family-like relationship, and he wasn’t someone I couldn’t contact directly,” adding, “E&B Soft, with whom we were conducting a joint business venture, complained of being wronged, and since a parliamentary audit was taking place at the time, I asked if the National Assembly could address this injustice. However, that was the only time I asked for help.”

He continued, “The issue raised in the tax audit pertains to value-added tax, and we have filed a tax appeal to contest it. There was no tax evasion.” He further explained, “As for the transfer of company funds, I did not take any money for personal use; it was simply the repayment of a debt I had lent to the company.”

In this regard, former lawmaker A categorically denied allegations that he had addressed E&B Soft (Cash Cow) during the parliamentary audit in response to a request for favors.

In a phone call with Edaily, former lawmaker A said, “I dealt with so many issues that I don’t recall (E&B Soft). Questions for parliamentary audits are mainly prepared by aides,” adding, “I know my brother-in-law, but I am not on speaking terms with his younger brother (Mr. Seol, CEO of Cash Cow). I have seen him once at a family gathering in the past, but that was decades ago, and I’ve had no significant contact with him since then.”

Regardless of the positions of both sides, questions are being raised as to whether it was appropriate for an individual dispute involving a company linked to a relative to be addressed during a parliamentary audit.

Kim Hyun-jung, a member of the Democratic Party of Korea on the Political Affairs Committee, stated, “As an institution subject to the ‘Conflict of Interest Prevention Act,’ the National Assembly must earn the public’s trust in fairness and transparency more than anyone else in the performance of its duties.” She added, “If a matter involving relatives or parties with a special relationship was addressed through parliamentary audit questioning, it is necessary to examine whether such questioning aligned with the purpose of the parliamentary audit—namely, serving the public interest and protecting the rights and interests of the people.”

She went on to emphasize, “The National Assembly’s authority to conduct parliamentary audits must not be perceived as a means of representing the interests of specific companies or individuals,” adding, “To ensure that parliamentary audits are conducted in a manner the public can trust, we must enhance the fairness and transparency of the questioning process and continuously review and improve relevant systems and practices.”

Allegations of Embezzlement and Breach of Trust Originating from Cash Cow, and “Revenue Manipulation” at AsWeMake

There are further reasons to pay close attention to the embezzlement and breach of trust allegations surrounding CashCow. This is due to indications of deep business and managerial ties with AsWeMake, a company recently embroiled in fraud controversies in the capital markets. In 2024, CashCow signed a business agreement with AsWeMake, a food ingredient mart platform operator. After securing approximately 30 billion won in external investment from dozens of domestic venture capital (VC) firms, AsWeMake sought to raise up to 70 billion won in new investment this year based on a company valuation of 150 billion won. However, during the investor due diligence process, allegations of financial data manipulation—including revenue, business partners, and bank balances—surfaced, and the company was ultimately sued on charges of fraud.

According to an E-Daily investigation, key individuals and some entities previously implicated in allegations of false tax invoices at Cash Cow were once again identified within AsWeMake’s business operations and transaction network. This suggests that the problematic transaction structure identified at Cash Cow—which is embroiled in capital erosion and civil and criminal disputes, with behind-the-scenes legal battles ongoing—is linked to allegations of revenue manipulation at another startup.

Related Article☞ Through its ongoing series, “Tracking Suspicions of a Chain of Accounting Fraud: The Trap of Fake Ledgers,” E-Daily is covering allegations that disputes related to Cash Cow extend to As We Make.