Founding Family Members of Korean Air Sentenced for Drug Trafficking

Two members of the founding family of Korean Air have been sentenced to suspended prison sentences for luxury goods through the national carrier's fleet, highlighting the excesses of conglomerates headed by a South Korean family .

Incheon District Court on Thursday sentenced Heather Cho to eight months in prison, with a fine of 4.88 million won and a lump sum of 64 million won. His mother, Lee Myung-hee, widow of the late President Cho Yang-ho, was sentenced to six months imprisonment, suspended for one year, with a fine of Won7m and a foreclosure of Won37m.

Ms. Cho was accused of having mobilized more than 200 times for more than six years from 2012 Korean Air employees for the smuggling of goods worth about 4,000 Won, including clothes and luxury bags. .

"The number of offenses committed and the amount of contraband goods are not small," said Judge Oh Chang-hoon. "They exploited the badets and employees of the company, using their status, to satisfy their personal desire."

But conditional sentences highlight the typical judicial leniency with regard to crimes committed by members of the chaebol family, despite growing public criticism of the excessive power and feeling of impunity to control family members of Korean conglomerates.

Ms. Cho gained worldwide notoriety in 2014 for her temper tantrum, in which she delayed an international flight of Korean Air by causing panic explosion among the cabin crew about how the macadamias were served.

The court's decision comes just three days after the return of Ms. Cho's younger sister, Emily Cho, as senior manager in charge of the social responsibility of the group's holding company, Hanjin Kal, and Jungseok Enterprise, its real estate leasing subsidiary. She was accused of throwing a cup of water on an advertising agent last year, provoking a public outcry over the family's unruly behavior.

The founding family was involved in other scandals, including physical badaults on the group's employees.

The return of Emily Cho to management, one year after his resignation as senior vice president of Korean Air after a police investigation into the incident, sparked strong protests from activist investors and unionized workers in the country. society.

The family crisis comes as uncertainty grows within the group as a militant investor advocates for better corporate governance.

The Korean Governance Enhancement Fund, which is Hanjin Kal's second largest shareholder with a 16% stake, said Ms. Cho's return violated "the principle of responsible management", as her misconduct had caused severe social and financial harm to the group.

Nearly one-fifth of the market value of Hanjin's five major units, including Korean Air, Hanjjin Kal, and budget company Jin Air, was wiped out more than six months after its jet incident in April 2018, announced the fund.

"His hasty return destroys the value of the company," said Park Yoo-kyung, an advisor at APG Asset Management. "I think the family needs more introspection. "[They have] become a symbol of the excesses of the family chaebol. "

Hanjin Kal's shares fell about 10% this week, as news of Cho's return to management.