Taiwanese digital payment provider Jkopay Co (街口支付) yesterday quickly moved to reassure the public after a court-ordered asset freeze on its parent company triggered a wave of retailer suspensions and user fund withdrawals.
The Taipei District Court on Thursday froze assets belonging to parent company Jko Fintech Co (街口金融科技), following a legal dispute with food and beverage maker Taisun Enterprise Co (泰山企業) over a contested NT$3.6 billion (US$123.27 million) investment.
Taisun said the investment made by former board members was invalid and is seeking the return of the funds.
Photo courtesy of Jkopay Co
Court officers attempted to seize Jko Fintech’s assets on-site, but were unsuccessful.
The ruling sparked concerns over the operational stability of Jkopay, prompting the company to hold an emergency news conference yesterday afternoon, during which it emphasized that its operations are legally and financially separate from its parent’s.
“All user money is stored in trust accounts that cannot be used for other purposes,” Jkopay chairman Jacob Mei (梅驊) said. “The funds are protected under trust law and cannot be affected by legal issues involving our parent company.”
Photo: CNA
Mei said that some partner merchants and users have suspended cooperation or withdrawn funds due to the situation.
However, he expressed gratitude to business partners who continue to support the platform and urged users to “view the situation objectively.”
As of the end of last month, Jkopay, which has estimated 6.5 million users, held NT$400 million in net assets — well above any regulatory threshold requiring a capital injection — and it has narrowed its losses over the past year, aiming to break even by next year, Mei said.
The company last month handled NT$6 billion in monthly transactions, with NT$4 billion in user funds held in trusts, he said.
The Financial Supervisory Commission confirmed that user funds are entirely separate, saying there is no risk of a bank run, and reiterated that trust mechanisms are in place to safeguard the money.
Despite the assurances, prominent e-commerce firms including E-Life Mall Corp (全國電子), Momo.com Inc (富邦媒體), PChome Online Inc (網路家庭) and Shopee Auction suspended Jkopay as a payment option. Momo.com, PChome and Shopee lifted the suspension hours later.
Physical retailers such as Daily Breakfast (達利早餐) and Guangsheng Pharmacy (廣生藥房) also temporarily removed the platform.
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