Exclusive: Govt recoups only half of W16.7b paid in back wages for Daeyoo Winia workers

The government has failed to recover roughly half of the approximately 16.7 billion won ($12.5 million) it paid out on behalf of Daeyoo Winia Group workers in unpaid wages and other compensation, according to data submitted to the National Assembly. While Winia recouped most of the advance through proceeds from its court-supervised rehabilitation sale, one affiliate's recovery rate fell below 1 percent.

The issue is set to resurface as a political flashpoint now that former group Chairman Park Young-woo and his daughter Park Eun-jin, chief executive of DYA, have been summoned as witnesses for this year's national audit — putting the question of liability for unpaid wages and the government's ability to claw back advance payments squarely back on the agenda.

According to a report on the status of advance wage payments and recoveries for Daeyoo Winia Group that the Ministry of Employment and Labor submitted to the National Assembly, a total of 16.7 billion won was paid to 1,198 workers across four affiliates — Winia, Winia Electronics, Winia Electronics Manufacturing and Winia DLab — as of Sept. 3. Of that amount, 8.47 billion won has been recovered, a recovery rate of 50.7 percent. The remaining 8.23 billion won has yet to be recouped.

Advance wage payments are funds the government disburses directly to workers when an employer fails to pay wages, with the expectation of recovering the money from the employer afterward. The system is designed to protect workers from unpaid-wage losses first, then recoup the outlay through employer repayment.

Recovery rates varied sharply by affiliate. At Winia, 5.5 billion won of the 5.61 billion won paid to 408 workers was recovered — a rate of 98.0 percent, leaving just 110 million won outstanding.

Winia's high recovery rate stems from the collection of repayment funds through proceeds from its court-supervised rehabilitation sale.

The Ministry of Employment and Labor said it collected approximately 5.46 billion won on Sept. 2 and lifted a provisional seizure order accordingly. That single collection accounted for roughly 64 percent of the total amount recovered across the entire group, significantly boosting the overall recovery figure.

For advance payments disbursed to Winia after May 12 this year, the ministry said it plans to pursue recovery in stages through tax delinquency procedures, including payment notices, demand notices and seizure under delinquency disposition.

Winia Electronics, by contrast, had a far weaker record. Only 1.15 billion won of the 5.6 billion won paid to 450 workers has been recovered — a rate of 20.5 percent — leaving 4.45 billion won outstanding.

The Korea Workers' Compensation and Welfare Service searched 35 land parcels belonging to Winia Electronics and provisionally seized six of them in 2022. In 2023, an on-site investigation identified a 485 million won deposit withdrawal claim and 600,000 shares of Winia Electronics Manufacturing, both of which were also provisionally seized.

For Winia Electronics, a ruling in a repayment claim case was handed down in June last year and confirmed in April this year, giving authorities an enforceable title. The ministry said it has continued filing claims in the company's bankruptcy proceedings and is monitoring the progress of asset auctions.

At Winia Electronics Manufacturing, 5.3 billion won was paid to 326 workers, but only 1.82 billion won has been recovered — a rate of 34.4 percent — leaving 3.48 billion won unrecouped. Combined with Winia Electronics, the two companies account for 7.93 billion won in outstanding advance payments.

A property search for Winia Electronics Manufacturing turned up no land or other assets, but the Korea Workers' Compensation and Welfare Service identified a claim for ownership transfer registration and a separate receivable on its own, both of which it provisionally seized in 2023. An enforceable title was secured in 2024, and a claim was subsequently filed in the company's bankruptcy proceedings.

The ministry said it received a distribution of approximately 1.82 billion won from Winia Electronics Manufacturing's bankruptcy proceedings on Feb. 12 this year, and that the bankruptcy case was closed on March 31. However, the ministry's submitted response did not explain the reason for the closure or outline any plan to recover the remaining outstanding claims.

Winia DLab's recovery rate stood at just 0.3 percent. Of the 188 million won paid to 14 workers, only 500,000 won has been recovered, leaving 187.5 million won outstanding.

The National Assembly's Climate, Energy, Environment and Labor Committee voted at a plenary session Tuesday to summon former Chairman Park Young-woo and DYA CEO Park Eun-jin as witnesses. The two are scheduled to appear at the Ministry of Employment and Labor's national audit on Tuesday and at a combined audit of the ministry and the Economic, Social and Labor Council on Oct. 27.

Meanwhile, Daeyoo Winia Group's total unpaid wages and severance pay are estimated at around 200 billion won ($149 million), of which roughly 160 billion won remains unsettled. The number of affected workers is believed to exceed 3,000. These figures represent the group's overall wage delinquency and are separate from the government advance payments tallied in the ministry's report.