Immigration office raids Korean Air
Chairman Cho under probe for slush fund
By Kang Seung-woo
Officials of the Korea Immigration Service searched the headquarters of Korean Air, Friday, over allegations that the owner family illegally hired foreign housekeepers.
Korean Air Chairman Cho Yang-ho
According to the justice ministry, it sent investigators dealing with immigration affairs to the head office of the nation’s largest carrier in Seoul.
The move came as the Immigration Office is probing claims that Korean Air has been involved in recruiting Filipino housekeepers for Chairman Cho Yang-ho’s family.
Speculation was raised that Cho and his wife hired housekeepers from the Philippines who could not speak Korean, and the airline’s regional office in the Southeast Asian country brokered the employment.
This is the latest blow to the owner family of the nation’s largest carrier whose members are under heavy fire over allegations of abusive behavior to their subordinates and other misconduct.
The prosecution said Thursday it has also been investigating whether the chief of Korean Air created an illegal slush fund.
According to prosecutors, the Financial Intelligence Unit (FIU) notified them in 2016 that it had detected “suspicious” cash flow from accounts belonging to Chairman Cho Yang-ho and his family members.
As a result, the prosecution seized the accounts and analyzed transactions to determine if they were part of a slush fund.
Prosecutors also launched a probe into allegations of tax evasion by Cho after the National Tax Service’s Seoul Regional Office lodged an official complaint April 30.
According to the tax office, Cho and his children inherited foreign assets from Cho Choong-hoon, the late Hanjin Group founder, but failed to report this. The inheritance tax owed is estimated to be 50 billion won ($46.8 million).
In response to the tax evasion charge, Hanjin Group, the largest shareholder of Korean Air, said that Cho Yang-ho did not realize this until 2016.
“After finding the tax omission in 2016, he reported it to the National Tax Service,” the business group said in a statement, adding he will pay the tax by this month’s payment deadline.
However, even if Cho pays the inheritance tax, he is still expected to face punishment, according to the prosecution.
Various legal bodies have begun investigations into Cho’s immediate family over allegations of repeated abusive behavior and criminal activity.
Earlier this month, the Korea Customs Service raided five locations including Cho’s home and Korean Air’s baggage handling office at Incheon International Airport over claims that the owner family used Korean Air flights to smuggle luxury goods into the country.
Last month, custom officials also searched the headquarters of Korean Air and the residences of the chairman’s and three children.
On Wednesday, Police banned his wife from leaving the country pending a probe into allegations that she verbally and physically assaulted company employees.
Lee Myung-hee, the director of Ilwoo Foundation, is suspected of verbally insulting construction workers in May 2014, when one of the hotels owned by the family-run conglomerate was being remodeled for expansion.
She is also alleged to have thrown blueprints at the workers, pointed fingers at them and obstructed their work. Lee is also accused of committing similar verbal assaults against her chauffeur and other Hanjin employees.
Police plans to summon her for questioning.
The Seoul Gangseo Police Station referred Cho Hyun-min, a former marketing executive of Korean Air and Cho’s youngest daughter, to the prosecution, Friday, over her alleged assault of an advertising agency official in March.