April 23, 2018 12:40
Korean Air has fired both daughters of owner Cho Yang-ho after the latest scandal exposing what looks like congenital anger management problems in the troubled family.
Cho apologized publicly on Sunday for the behavior of Cho Hyun-ah (44) and Cho Hyun-min (35), who have made worldwide headlines with their histrionics.
"I would like to apologize to the public and staff of Korean Air," Cho said, adding his two daughters will "immediately step down from all posts within the group."
Cho Hyun-min disgraced herself a couple of weeks ago amid allegations that she threw a bottle of water in an advertising staffer's face during one of the uncontrollable screaming fits to which it later emerged she is prone.
At the time she held seven executive positions in the airline's parent Hanjin Group, including senior vice president of budget carrier Jin Air and CEO of KAL Hotel Network.
Her older sister Cho Hyun-ah, disgraced and convicted after the "nut rage" scandal in 2014, quietly slipped back into management at the family firm recently by being appointed as president of KAL Hotel Network.
"As the chairman of Korean Air and as the head of a family, I feel devastated by the immature behavior of my daughter," Cho senior said referring to the "office rage" incident. "My shortcomings are responsible for everything and I have erred." The chairman said he will create a new post of vice chairman and appoint Seok Tae-soo, the CEO of Hanjin KAL Corporation to the position.
But the scandal is only getting worse. On Saturday, the Korea Customs Service conducted a dawn raid on the offices of the Cho family at Korean Air headquarters over allegations that they operated a special team of workers to assist in the smuggling of luxury goods and other items into Korea aboard the carrier's jets.
Customs investigators also scrutinized the overseas credit card spending of the Cho sisters as well as their mother over the last five years. Investigators said they found multiple evidence that the Cho family bought luxury goods overseas and brought them into Korea without paying excise tax. Although no specific items were seized, they took photographs as evidence. They also seized computer files and other documents and are compiling a list of smuggled items.
A Korea Customs Service staffer said, "We are looking at whether each item the owner's family purchased abroad is actually in their possession and whether proper taxes were paid. If we find specific evidence of tax evasion, they will be questioned."
Customs investigators do not have the right to make arrests but have the legal power to search businesses and private individuals who are suspected of smuggling. This is the first time they have targeted the owner family of a major conglomerate.
Industry insiders are afraid that the latest investigation may spread to other carriers. One airline industry source said, "A dawn raid on the offices of the owners of a conglomerate based on an online tip-off is rather excessive." But the Korea Customs Service said, "We felt that an investigation was necessary and there is no ulterior motive."
The current administration came in on a promise to clean out the Augean stable of collusion between government and big business that was highlighted afresh in the spectacular downfall of ex-President Park Geun-hye.
Managers at Korean Air have told investigators that expensive whiskey and other liquor that were smuggled into the country were distributed at dinners for customs officials at Incheon International Airport. Korean Air denies the allegations.
Cho senior is having a grim time after the spectacular bankruptcy of Hanjin Shipping last year. He was also removed as chairman of the organizing committee for the Pyeongchang Winter Olympics.
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