[Exclusive] One of the AmorePacific Employees Embezzling 3.5 Billion Won Is the Former CEO's Son

Former AmorePacific CEO's Son Involved in Embezzlement Case
Embezzling Employees Fired and Ultimately Investigated by Police

Amore New Headquarters Exterior View

[Asia Economy Reporters Song Seung-yoon, Lee Min-woo, Gong Byung-sun] It has been confirmed that one of the three Amorepacific employees who embezzled company funds to use for illegal gambling and virtual asset investments(See Asia Economy May 17th front page article ‘Amorepacific also... Embezzlement Tarnishes the Cosmetics Industry’) is the son of former CEO A, who resigned in 2014.

According to a comprehensive report by Asia Economy on the 19th, among the three Amorepacific employees recently dismissed due to the embezzlement case was Mr. B, the son of former CEO A. He is said to have been the most heavily involved in this embezzlement case. Former CEO A joined Amorepacific (then Taepyeongyang) in 1983, served as Vice President of Marketing and CEO, and resigned in 2014. Afterwards, he served as president of Kyowon Kumon Business Division and Edu Business Division, became president of Hansol Education’s New Growth Division in 2018, and since last year has been the CEO of Hansol Children’s Care Foundation.

Previously, three sales employees of Amorepacific, including Mr. B, embezzled 3.5 billion KRW of company funds over several years, using the money for stock and virtual asset investments and illegal gambling funds, which was uncovered through an internal regular audit. They diverted company assets by supplying products to clients and embezzling payments or issuing false estimates or tax invoices. They also used methods such as cashing gift certificates. During this process, investigations revealed that they gathered at remote work locations or inside the company to engage in illegal gambling with other employees.

Amorepacific held a personnel committee and dismissed them, recovering most of the embezzled funds. They also reported recurrence prevention measures to the audit committee under the board of directors and notified the company of these facts. However, before this report, they had not taken separate actions such as filing complaints with investigative agencies, which sparked controversy. Criticism also arose that they failed to disclose the embezzlement since the amount was less than 1% of equity capital, showing a lack of responsibility as a listed company.

The company filed a complaint with the Yongsan Police Station in Seoul only the day before, accusing them of embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes. The police requested additional details on the complaint from Amorepacific and plan to sequentially summon and investigate the related parties once the facts are confirmed.

In an official statement, Amorepacific said, "We will improve systems and processes across all sales activities and strengthen internal controls to prevent similar cases from recurring," and expressed apologies, stating, "We are sorry for causing concern to many who love Amorepacific due to this unfortunate incident."