Korean Air chief indicted for embezzlement, daughter cleared of assault charges

Cho Yang-ho and Cho Hyun-min.

Korean prosecutors on Monday indicted Hanjin Group and Korean Air Lines Co. Chairman Cho Yang-ho for several charges including embezzlement and breach of trust without detaining him, while letting his youngest daughter Hyun-min, a former executive of Korean Air accused of throwing a cup at an ad agency executive, off the hook.

According to prosecutors on Monday, the chairman is accused of causing losses to the airline by embezzling some 19.6 billion won ($17.3 million) from company funds between 2013 and May 2018 by unfairly awarding business contracts to intermediary companies controlled by his family.

The patriarch is also suspected of ordering the acquisition of stocks in affiliated companies from his children at unfairly high prices in 2014.

On Tuesday, shares of Korean Air closed up 0.59 percent at 25,700 won, and those of sister budget carrier Jin Air 0.54 percent higher at 18,550 won. The stocks have been weighed down by the scandals of the owner family throughout the year.

Prosecutors said Korean Air paid 1.7 billion won in attorney fees related to the handling of several criminal cases involving Cho's family and this also constitutes embezzlement.

Meanwhile, his youngest daughter Hyun-min was cleared of charges regarding her ‘water cup rage’. She had been under investigation over allegations that she threw a glass cup of water at an advertising company official during a business meeting in March. Prosecutors said the glass cup was thrown to the direction where there was nobody.

Hyun-min was not the first child of Chairman Cho who was investigated by prosecutors. Her older sister Cho Hyun-ah caused a ‘nut rage’ incident in 2014 when she forced a plane to return to the gate because she was unhappy with the way her nuts were served. Like her sister, she had disgracefully resigned from the post of Korean Air vice president after the incident but attempted to return to the management as chief of KAL Hotel Network.

Since the latest ‘water cup rage’ incident, the entire family - father and mother and two daughters - came under scrutiny for several charges including the chairman’s embezzlement and the owner family’s attempt to frequently smuggle luxury goods through Korean Air plane staff to avoid taxes.

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