Chung Kyu-chil, 51, told police in Seoul that his feet were missing when he woke in his shop on 11 December after a heavy drinking bout the night before. He said a customer found him bleeding heavily and took him to hospital.
Police at first suspected Mr Chung's creditors, because he had run up pounds 150,000 in stock market and gambling losses.
But police later found Mr Chung had taken out two dozen insurance policies in the past three months that would pay him up to pounds 1m if he became accidentally disabled.
Mr Chung then admitted he had hired Kim Kui-yong, 41, a taxi driver, to sever his feet at the ankle, promising to pay him pounds 25,000 if the scam was successful. The taxi driver told police that he chopped off Mr Chung's feet with an axe and dumped them into the Han River.
Police arrested the taxi driver on assault charges but said they have no legal grounds to arrest Mr Chung because he has not tried to collect the insurance money. (AP)