Scandal-prone family behind Korean Air faces customs probe

Customs investigators leaving Korean Air's main office in Seoul yesterday after a raid to search for evidence of smuggling.
Customs investigators leaving Korean Air's main office in Seoul yesterday after a raid to search for evidence of smuggling.PHOTO: EPA-EFE
Ms Cho Hyun Min.
Ms Cho Hyun Min.PHOTO: REUTERS
Ms Cho Hyun Ah.
Ms Cho Hyun Ah.PHOTO: AGENCE FRANCE-PRESSE

Office, family home raided after accusation of luxury-goods smuggling

SEOUL • South Korean customs officials raided the headquarters of Korean Air Lines Co - the country's largest carrier - and its chairman's family home to look into allegations that the family evaded duties on luxury goods brought into the country, media reports said.

Investigators from the Korea Customs Service yesterday stormed into the main office of Korean Air in western Seoul and the house of chairman Cho Yang Ho as well as his two daughters and son, Yonhap reported.

"We searched for evidence related to allegations of smuggling foreign goods and duty evasion," a customs official was quoted as saying.

"It is the first time that customs officials have raided the owning family of a local conglomerate."

The tax evasion accusation compounds recent woes facing the scandal-prone family.

Four years ago, Mr Cho's elder daughter Hyun Ah created a national scandal - dubbed "nut rage" - after she ordered a Korean Air plane to turn back to the gate at a New York airport in a fit over the way she was served macadamia nuts.

  • Badly behaved Cho sisters

  • WATER RAGE

    Ms Cho Hyun Min, a senior vice-president at Korean Air, threw water in the face of an advertising agency manager during a recent business meeting, Korean media reported.

    Korean Air said she had thrown either a water bottle or a cup on the floor, but not at anyone's face. Last Monday, the airline said it was a cup.

    Ms Cho cut short a vacation overseas and arrived back home last Sunday. She denied she had thrown a cup of water at the manager's face, but said she had "pushed" it and apologised for what she called her "foolish behaviour".

    Korean Air suspended her from her duties last Monday pending the police investigation. The company's unions have urged her to step down.

    NUT RAGE

    Ms Cho Hyun Ah, the older Cho sister, made headlines over a notorious "nut rage" incident in 2014, when she lost her temper over the way she was served nuts in first class and ordered the Korean Air plane she was on to return to its gate at the John F. Kennedy airport in New York.

    She was found guilty of breaking aviation law and jailed for a year, but was freed in May 2015 after an appeal. She returned to senior management at Korean Air last month.

    REUTERS, THE KOREA HERALD/ASIA NEWS NETWORK

In recent weeks, Mr Cho's younger daughter, Hyun Min, made headlines for allegedly throwing water in the face of an advertising agency worker during a business meeting. The incident has been nicknamed "water rage".

Police searched Korean Air's headquarters over the incident last Thursday.

The scandals have reignited public impatience with family-run conglomerates known as chaebol, which dominate South Korea's economy, over what some people see as unchecked bad behaviour by the rich and powerful, especially second-and third-generation children of the founders.

Korean Air's stock fell as much as 4.1 per cent last Thursday. It is down more than 7 per cent since April 12, when local media first reported the alleged water-throwing incident. Budget airline affiliate Jin Air, where the younger Ms Cho is an executive vice-president, dropped 5.3 per cent.

An online petition seeking a government ban on the company from using "Korean" in its name, had gathered more than 84,000 signatures, as of last Wednesday afternoon.

The tax evasion probe follows a series of whistle-blower claims that the Cho family frequently smuggled luxury goods through employee-only passageways.

The Korea Customs Service said last Friday that it was looking into the credit card details of Mr Cho, his wife Lee Myung Hee, and their three children.

"In case there is a considerable amount of discrepancy between the spending details and the customs payment records, and the (Cho family members) fail to clarify the reasons, it may be possible to summon them for questioning," said an official.

If they are found guilty of having brought in luxury items without paying duties, they can be jailed for up to five years and fined up to 10 times the duties evaded.

THE KOREA HERALD/ASIA NEWS NETWORK, REUTERS

A version of this article appeared in the print edition of The Sunday Times on April 22, 2018, with the headline 'Scandal-prone family behind Korean Air faces customs probe'. Print Edition | Subscribe