[Exclusive] Another Embezzlement Scandal... Amorepacific Employees Embezzle 3 Billion Won for Cryptocurrency and Illegal Gambling

[Asia Economy reporters Minwoo Lee and Seungyoon Song] It has been confirmed that Amorepacific employees embezzled company funds and used them for virtual asset investments and illegal gambling. Following Ostem Implant and Woori Bank, embezzlement incidents have occurred across various industries, intensifying criticism of internal corporate controls.

According to industry sources on the 17th, three sales employees at Amorepacific embezzled company funds and used them for stocks, virtual asset investments, and illegal gambling. They diverted company assets by supplying products to clients and pocketing the payments or issuing false estimates or tax invoices. They also used loopholes such as cashing in gift certificates. The amount embezzled is confirmed to be in the 3 billion KRW range.

Moreover, they negatively influenced other employees around them. After introducing some employees to illegal gambling websites, about ten people gathered to engage in illegal gambling both at the office and while working from home. The company’s personnel committee disciplined them and took measures to recover the embezzled funds. The level of disciplinary action, such as dismissal, was not disclosed. An Amorepacific official explained, "Since the amount does not exceed 5% of equity capital, it is not subject to mandatory disclosure, so it was not disclosed. We did not file a separate complaint with the police, and after internal audits, most of the embezzled amount has been recovered."

With such incidents occurring at Amorepacific, the largest company in the industry after Clio, the cosmetics industry is also feeling gloomy. Earlier, on the 13th, the Seoul Seongdong Police Station arrested a man in his 40s, Mr. A, who worked as a manager in Clio’s sales department, on charges of embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes. He is accused of embezzling about 1.89 billion KRW by diverting part of the sales revenue received from a home shopping cosmetics seller into his own bank account from early last year to early this year. It is known that he already squandered the embezzled money on online gambling. An employee of a mid-sized cosmetics company, Mr. A, said, "We were all struggling together through the worst business conditions caused by COVID-19, but it is absurd and outrageous that someone embezzled company money and squandered it."

Not only in the cosmetics industry but also in medical devices and finance, embezzlement incidents have occurred across industries this year, increasing criticism of internal corporate controls. Earlier this year, Ostem Implant experienced the largest embezzlement in a listed company’s history, amounting to about 221.5 billion KRW. Subsequently, company funds were leaked one after another at Kyeyang Electric (24.5 billion KRW), Seoul Gangdong District Office (11.5 billion KRW), and Woori Bank (61.4 billion KRW).