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South Korea

More trouble for disgraced Korean Air family as chairman is questioned over suspected tax evasion

Cho Yang-ho joins his wife and two daughters who were questioned by authorities since April on a variety of charges including tax evasions, obstruction of business and violating an immigration law

PUBLISHED : Thursday, 28 June, 2018, 1:28pm
UPDATED : Thursday, 28 June, 2018, 1:28pm

Korean Air’s chairman apologised Thursday before being questioned by prosecutors investigating alleged wrongdoing by him and his family, deepening woes at South Korea’s largest airline company.

Cho Yang-ho, chair and chief executive of Korean Air Lines Co., said “sorry” and bowed his head before entering a Seoul prosecutors’ office. He said he will fully collaborate with the investigation.

Cho joins his wife and two daughters who were questioned by authorities since April on a variety of charges including tax evasions, obstruction of business and violating an immigration law.

The 69-year-old leader at the South Korean flag carrier is suspected of embezzlement and breach of trust.

Local media said prosecutors are also looking into Cho’s alleged evasion of inheritance taxes when he received millions of dollars in assets from his late father and founder of Hanjin, Korean Air’s parent group.

An official at a Seoul prosecutors’ office did not confirm the reports. Korean Air declined to comment on the allegations.

Korean Air employees have taken to the streets to demand Cho’s resignation as public anger mounted against the family’s behaviours.

Hyun-min, the younger of Cho’s two daughters, was investigated for allegedly hurling a cup of water during a business meeting.

Hyun-ah, the older daughter of Cho, was questioned by South Korean immigration officials on suspicion she unlawfully hired housekeepers from the Philippines.

Hyun-ah won global notoriety in 2014 when she delayed a Korean Air flight because she got angry over the way nuts were served.

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She was released from jail in South Korea in May 2015 after the top court suspended her sentence over the case. She returned to leadership briefly before resigning again this year.

Immigration officials also investigated their mother, Lee Myeong-hee, suspecting that she unlawfully recruited and hired about 10 to 20 housekeepers from the Philippines by documenting them as Korean Air trainees.

Under South Korean law, foreign nationals must obtain visas given to marriage migrants or people of Korean heritage to work as housekeepers.

The disgraced Korean Air family touched off anger among South Koreans critical of the unruly behaviours by their business elites that control the big conglomerates dominating the economy.

While families like Cho have a minority stake in publicly traded companies, they have often acted like emperors and exercised outsized influence over the businesses founded by their father or grandfather.

South Korea’s President Moon Jae-in took office in 2017 on campaigns to rein in “chaebol” as the family-controlled business conglomerates are known.

His predecessor was impeached over political corruption scandals involving chaebol like Samsung and Lotte.