LG Chem loses 24billion won in e-mail phishing scamLG Chem, an affiliate of LG Group and the nation’s top chemical company, lost a whopping 24 billion won ($20.96 million) in an e-mail scam last month, the company revealed over the weekend.
The organization behind the scheme is currently unknown.
The scammers sent LG Chem an e-mail that appeared to be from business partner Aramco Product Trading, a subsidiary of Saudi Arabian state-run energy giant Saudi Aramco, telling it that all future payments should be directed to a new account.
The employee in charge of money transfers at LG Chem felt confident wiring the funds because the e-mail address and name of the bank account holder were identical.
LG Chem suspects the scammers intercepted e-mails between the two companies to acquire information used in the fraud.
This kind of e-mail fraud, dubbed “sphere phishing,” is on the rise. The nation’s top watchdog, the Financial Supervisory Service, issued a warning about the issue in March.
LG Chem has been purchasing naphtha, or liquid hydrocarbon mixtures used mostly as solvents and diluents, from the Saudi Aramco to process into petrochemical products.
After the LG affiliate discovered it had been scammed, it asked the Seoul Central District Court to launch an investigation.
LG Chem says it is considering filing a suit against both its bank and Aramco Product Trading.
“The case in question is the result of organized e-mail hacks at our major business partners,” said an LG Chem spokesman.
“We are considering countermeasures, given that the bank we deal with and our business counterparts could be responsible.”
Prosecutors say it won’t be easy to find the scammer.
According to data from the Korea International Trade Association, 71 small and midsize Korean companies trading with overseas partners fell victim to money transfer scams via e-mail in 2014.
In the first half of last year - the most recent period with data available - 61 smaller enterprises had fallen prey to the schemes.
Still, it is unprecedented for a major conglomerate to be ripped off on such a massive scale.
The damages from the scam are equivalent to 5.2 percent of the operating profit LG Chem reported for the first quarter, 457.7 billion won.
BY SEO JI-EUN [firstname.lastname@example.org]