April 19, 2024

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[THE INVESTOR] Korean Air and Hanjin Group Chairman Cho Yang-ho is accused of using embezzled company funds to buy stocks for his children as part of their succession in the conglomerate. 

The prosecution on July 16 said it found new evidence that Cho, who is under investigation for alleged embezzlement, tax evasion and breach of trust, may have used unfair profits earned through awarding contracts to companies controlled by family members to purchase shares for his three children: Hyun-ah, Won-tae and Hyun-min. 

Korean Air Chairman Cho Yang-ho

The 69-year-old patriarch of the Korean flag carrier is suspected of pocketing over 20 billion won (US$17.71 million) in company funds, and paying lawyer fees for his family with company asset. He is also accused of dodging over 50 billion won in inheritance taxes with his sister back in 2002. The prosecution claimed Cho also violated the Pharmaceutical Affairs Act, saying he operated a pharmacy without a license, near a university with ties to his conglomerate. 

Cho has denied all allegations. 

Earlier on July 2, the prosecution filed an arrest warrant for the charges, but the Seoul Southern District Court rejected the request, saying it does not have the ground to arrest at this time. 

Local authorities, based on further investigation, are seeking to refile an arrest warrant soon, suspecting the embezzlement amount could well exceed 20 billion won.

By Ahn Sung-mi (sahn@heraldcorp.com)