By Lee Kyung-min
Hanjin Group Cho Yang-ho removed his two daughters from company management, in a move to limit blowback on the company over the fast-spreading controversy over their “anger management issues.”
“I offer my deepest apology to the victims, company officials and the public at large on behalf of my daughters' misbehavior,” Cho said in a press statement.
“I will have my daughters Cho Hyun-ah and Cho Hyun-min resign as KAL Hotel president and Korean Air senior executive, respectively. I will overhaul company management by strengthening the professional-oriented decision-making structure to prevent recurrence of any similar incidents.”
The decision came amid souring public sentiment against group heiress Cho Hyun-min embroiled in allegations she splashed water in the face of an ad agency official ― among many other forms of abuse ― because she was “enraged” at his work performance.
The so-called “water rage” incident is similar to the “nut rage” case of her older sister Cho Hyun-ah that sparked nationwide outrage over the rich and powerful abusing their positions.
The announcement also follows an investigation launched by government agencies that failed to oversee the business affairs of the group. An internal inspection is underway at the Ministry of Land, Infrastructure and Transport over why it failed to disqualify Cho Hyun-min, a U.S. citizen who identifies herself as Emily Lee Cho, from retaining a board of directors post at Jin Air, the group's low-cost carrier, for six years. Under the related law, a foreign national cannot hold a post on the board of a domestic or international logistics company.
Heavy punishment is expected for a number of ministry officials that had been responsible for paper reviews before granting the company's request for changes to the board of directors on three occasions between 2010 and 2016. The written requests submitted on all three occasions, according to the ministry, stated her name as Emily Lee Cho and her citizenship as American, a clear irregularity supervising officials should have detected. Jin Air said it was unaware of the related law, increasing criticism on the ministry for failing to observe proper enforcement of the law. The internal investigation could be expanded if referred to police or the prosecution to determine whether the conglomerate and the ministry condoned such an illegality knowingly and deliberately based on mutual understanding and possible quid pro quo.
The move to uncover many similar activities involving the Cho family is the latest in belated efforts to rectify the wrongdoings occurred under former administrations. The Korea Customs Service started an investigation into allegations the two sisters used the airline to smuggle luxury goods, furniture and other personal items by bypassing the necessary customs clearance protocols.
A team of agency investigators searched the homes of the two sisters and their brother as well as company headquarters at Incheon International Airport, Saturday, to identify whether they paid the due amount of taxes on furniture, personal clothing and home appliances purchased overseas. The officials said overseas financial transaction records will be matched with the items.
Meanwhile, a police investigation is ongoing into Cho Hyun-min over an allegation of evidence-tampering in the “water rage” case. Police searched offices belonging to her and the marketing department to confiscate four cellphones including two used by Cho and two others used by company executives attending the meeting at which the alleged abuse occurred. The officials looked into whether she made any efforts to talk the witnesses out of making statements against her by threatening or bribing them. Some witnesses said she threw an empty glass at the ad agency employee in which case she could be prosecuted for aggravated assault. Cho has denied the allegation, claiming she did not throw the glass. Hanjin is the largest shareholder of the full-service airline.