South Korean petrochemical company LG Chem has asked Seoul for help retrieving US$21 million it says it was tricked into transferring into a fake bank account. LG Chem has said that it was under the mistaken belief that it was paying supplier Aramco Products Trading for naphtha it received in late March.
LG Chem said it had received an email in March that appeared to be from Saudi Arabia’s Aramco Products Trading and which said the Saudi Arabian supplier had changed its bank account.
The email’s sender asked LG Chem to transfer a 24 billion South Korean won (US$21 million) payment to a new bank account, which LG did. The account, however, did not belong to Aramco Products.
The Seoul Central District Prosecutors Office is now investigating the incident, seeking to determine who sent the email to LG Chem and whether the petrochemicals company was hacked.
“We have filed a complaint with the Korean prosecution, and plan to come up with measures for holding all those involved responsible for the damages,” LG Chem spokesperson Park Chang-seon said last week.
LG Chem may be considering taking legal action against Aramco Products if it concludes that the theft was made possible because the Saudi Aramco subsidiary failed to protect its email accounts.
Aramco Products has supplied LG Chem with naphtha for years and is also the biggest shareholder in South Korean refiner S-Oil. Naphtha is used to make plastics and other petrochemical products.
Saudi Aramco said in October 2015 that fraudsters had targeted its trading unit, pretending to work for India’s state-run Oil and Natural Gas Corp. (ONGC), but that the attempt had been foiled. Indian press reports, however, claimed at the time that Saudi Aramco had been tricked into making a payment equivalent to US$30 million into a fake bank account that it thought was ONGC’s. The payment was for naphtha that had been bought from ONGC, the press reports said.
Saudi Aramco has declined to comment on the LG Chem incident.