Korean Air chief appears for questioning over suspected tax evasion (updated)

Jin Air Co

28/06/2018 01:56

* Outburst by Cho's daughter sparked public outrage
    * S.Korea's family-owned conglomerates face growing scrutiny
    * President Moon Jae-in pledged to curb power of 'chaebols'

 (Adds quote, colour, background, share moves)
    SEOUL, June 28 (Reuters) - Korean Air Lines  003490.KS 
Chairman Cho Yang-ho appeared on Thursday at the prosecutor's
office for questioning over allegations of tax evasion and other
financial crimes, as South Korea's family-owned conglomerates
face growing scrutiny.
    "I will tell the prosecutors everything," 69-year-old Cho
Yang-ho said before entering the prosecutors' office in Seoul,
as protestors called for his arrest. 
    An angry outburst at a business meeting by Cho's youngest
daughter, Cho Hyun-min, sparked public outrage at alleged abuse
of power by South Korean family-owned conglomerates, or
chaebols, leading to investigations of several of his family
members.  urn:newsml:reuters.com:*:nL3N1T21Q0
    South Korea's President Moon Jae-in has pledged to curb the
excessive power of chaebols and improve their governance
following a corruption scandal involving his impeached
predecessor and the chief of Samsung Electronics  005930.KS .  
    "It seems that the government is using the Korean Air
controversy to tame major chaebols like Samsung and Hyundai,"
said Park Ju-gun, head of corporate analysis firm CEO. 
    Cho is facing charges of tax evasion, breach of trust and
embezzlement, a prosecution official said. 
    Korean Air Lines declined to comment. 
    The junior Cho was under a storm of public criticism for
allegedly throwing a drink at a business meeting attendee. 
    She is the younger sister of Heather Cho, who 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. 
    The chairman has publicly apologised and had his daughters
step down from their positions at the airline and its
affiliates, while he also quit his position as chief executive
at budget affiliate Jin Air  272450.KS .     
    Shares of Korean Air fell 2.7 percent, and Jin Air was down
1.6 percent compared to a 0.9 percent fall in the broader market
 .KS11  as of 0055 GMT.
    Korean Air shares have fallen 21 percent since April when
the controversy first erupted, while Jin Air has tumbled 21
percent, lagging the wider market's 4 percent fall.

 (Reporting by Joyce Lee, Writing by Hyunjoo Jin; Editing by
Stephen Coates)
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net))