Korean Air chairman to face trial for embezzlement

By Kim Hyun-bin

Cho Yang-ho, chairman of Hanjin Group and the country's largest full service carrier (FSC) Korean Airlines was indicted Monday for embezzlement, tax evasion and breach of trust without detention.

“After the arrest warrant was denied (July 2) prosecutors conducted a further investigation, but the new evidence was not enough to issue an arrest warrant,” the Seoul Southern Prosecutors Office said Monday.

However, prosecutors say Cho violated several laws including the Adjustment of the International Taxes Act and the Pharmaceutical Affairs Act.

According to the prosecution, the 69-year-old embezzled 19.6 billion won ($17.3 million) in company funds and caused losses to the airline by unfairly awarding contracts to family owned businesses.

From 2013 to May 2018, the chairman took advantage of tariffs paid by Trion Trading when purchasing airline equipment and in-flight duty free goods.

He is also suspected of taking 152 billion won in medical care benefits from the National Health Insurance after illegally running a pharmacy without a license from October 2010 to December 2014. The pharmacy is situated near Inha University Hospital in Seoul, where Cho is a chairman of the board.

However, prosecutors did not charge him with evasion of inheritance taxes worth 61 billion won over foreign assets due to the expiration of the statute of limitations.

Since June, Cho has been summoned by police and prosecutors over numerous allegations, which he denies.

Prosecutors requested an arrest warrant for alleged tax dodging, embezzlement, breach of trust and fraud but the court denied the request July 2, calling the charges disputable and difficult to acknowledge the validity of.

Nearly all of Cho's family members have been in trouble with the law. Earlier this year, Cho's wife and his youngest daughters were summoned for questioning after reports of physical and verbal violence against company staff and other people under their authority.

The youngest daughter Hyun-min, a former marketing executive of Korean Air, avoided charges of assaulting an advertising agency official.

She had been under investigation for throwing a cup of water at an advertisement company official during a meeting in March.

However, all charges were dropped as the victim did not want to file charges.

Hyun-min is the younger sister of Hyun-ah, who is infamous for the “nut rage” incident in 2014, where she forced a plane back to the boarding gate at New York's John F. Kennedy International Airport after being upset about how her macadamia nuts were served in the first class cabin. The nuts were served in the bag instead of on a plate.