Stolen W61b paid back by government to Iran’s Dayyani

South Korea’s financial authorities recently returned over 61.4 billion won ($48.84 million) owed to Iran’s Dayyani Group, the amount that was stolen in an embezzlement scheme here between late 2012 and 2018, sources said Tuesday.

The policymaking Financial Services Commission has returned most of the total 73 billion won owed to Dayyani’s consumer electronics arm, Entekhab, as compensation over the Iranian business’ failed takeover of Daewoo Electronics back in 2010.

Woori Bank, a top commercial lender here, had managed the money in the meantime, as the payment to Dayyani had been delayed due to US sanctions on Iran. The bank, however, failed to notice that an employee had withdrawn a combined 61.4 billion won over the course of six years, and discovered the embezzlement just last month.

Police arrested the employee surnamed Jeon, who is in his 40s, on April 30, who was later found to have lost more than half of the stolen money from investments in high-risk stock derivative products. Jeon’s younger brother, who is not a bank employee, and a former employee of a Woori Bank affiliate were also arrested as suspected co-conspirators. Jeon lost 31.8 billion won after investing in futures option products, according to the police.

Financial authorities are currently taking the “necessary steps” to return the remaining money owed to Dayyani, sources said.

In 2018, the International Center for Settlement of Investment Disputes -- the World Bank’s settlement body -- ordered Seoul to pay Dayyani about 73 billion won after Entekhab failed in 2010 to purchase a majority stake in the now-dissolved Daewoo Electronics. Entekhab paid a 57.8 billion deposit as a preferred bidder, but had struggled to get the money back.

The financial authorities and Woori Bank received public flak for their lax oversight, as the embezzlement scandal was only discovered recently. The watchdog Financial Supervisory Service reportedly ran a total of 11 audits on Woori from 2012 and 2018 when the embezzlement took place, but failed to raise any red flags.

By Jung Min-kyung (mkjung@heraldcorp.com)