FILE PHOTO: Korean Air Lines Chairman Cho Yang-ho arrives at a court in Seoul, South Korea, July 5, 2018. REUTERS/Kim Hong-Ji
October 15, 2018
SEOUL (Reuters) – Korean Air Lines Co Ltd <003490.KS> Chairman Cho Yang-ho was indicted on Monday on charges including embezzlement and breach of trust, South Korean prosecutors said, adding to a string of woes at the country’s biggest airline group.
Cho is the latest head of a big business group, or chaebol, to face legal challenges in South Korea since President Moon Jae-in took office in 2017 with a pledge to curb the excessive power of family-owned conglomerates and improve their governance.
Earlier this month, an appeals court found the chairman of retail-to-chemicals conglomerate Lotte Group, Shin Dong-bin, guilty of charges including bribery and breach of trust for his role in an influence-peddling scandal that led to the ouster of the country’s former president, Park Geun-hye.
Samsung Group’s de facto leader Jay Y. Lee was also convicted of corruption in the same bribery scandal. Both Lee and Shin are currently awaiting rulings from the country’s top court after their jail terms were suspended by a lower court.
A Seoul prosecutors’ office on Monday said Cho took 19.6 billion won ($17 million) commission from 2003 through 2018 by setting up a trading company to broker aircraft equipment and in-flight duty-free goods purchase deals for Korean Air, causing the same amount of loss to the airline.
Korean Air declined to comment and did not make Cho available for comment.
Also on Monday, Emily Cho, the chairman’s youngest daughter, was cleared of all charges related to her allegedly throwing a drink at two business meeting attendees in April, because the attendees did not want to press charges, the Seoul Southern District Prosecutors’ office said.
That incident re-ignited public resentment toward the perceived unchecked behavior of some chaebol family members, leading to investigations of alleged wrongdoing by other family members.
Chairman Cho’s elder daughter, Heather Cho, was jailed in 2014 for demanding a Korean Air Lines plane return to its gate at a New York airport due to the way she was served nuts in first class.
Shares in Korean Air fell 0.6 percent on Monday, while its parent Hanjin Kal Corp <180640.KS>, in which chairman Cho has a 17.84 percent stake, lost 2 percent.
(Reporting by Heekyong Yang; Editing by Hyunjoo Jin and Christopher Cushing)
