S.Korea delays decision on whether to cancel Jin Air's licence

Jin Air Co

29/06/2018 07:38

SEOUL, June 29 (Reuters) - South Korea on Friday delayed a
decision on whether to cancel the aviation business licence of
budget airline Jin Air Co Ltd  272450.KS  given the "grave
impact" cancellation would have on the airline industry.
    The Ministry of Land, Infrastructure and Transport conducted
a review of whether Jin Air, an affiliate of Korean Air Lines Co
Ltd  003490.KS , violated transport law by appointing a
non-Korean - controlling family member Cho Hyun-min - as a board
director.
    Cho, 35, is a U.S. citizen and the youngest daughter of
Korean Air Lines Co Ltd Chairman Cho Yang-ho. She stepped down
as senior vice president at Jin Air in April after reports of
inappropriate conduct at a business meeting prompted an outcry
over the behaviour of families running conglomerates.
 urn:newsml:reuters.com:*:nL3N1SG14V
    "Worldwide, it is very rare that a licence of a company is
cancelled. Also in our case, this will have a grave impact on
the airline industry. There is controversy over the legality of
cancellation as well," Vice Transport Minister Kim Jeong-ryeol
said at a briefing.
    He said the ministry will hold a hearing and listen to the
views of stakeholders including employees, and that law firms
and professors have expressed mixed opinions on the matter.
    Jin Air in a statement said it will sincerely cooperate with
the hearing where it will express its position.
    It is South Korea's second-largest discount carrier after
Jeju Air Co Ltd  089590.KS . It employs about 1,900 workers as
well as over 10,000 subcontractors.
    A workers' union at Korean Air said it will protest if Jin
Air's licence is cancelled, which they said would threaten job
security and the livelihood of workers.
    Reflecting uncertainty of the airline's fate, shares of Jin
Air ended down 0.4 percent on Friday whereas those of Korean Air
rose 4.4 percent. The wider market  .KS11  was 0.5 percent
higher.
    The public furore over Cho's behaviour at the business
meeting prompted investigations into several of her family
members, including Chairman Cho who appeared at the prosecutor's
office for questioning on Thursday.  urn:newsml:reuters.com:*:nL4N1TU06F
    Cho Hyun-min is a younger sister of Heather Cho who achieved
global notoriety in the 2014 "nut rage" incident, when she lost
her temper over the way she was served nuts in first class
before takeoff from New York, eventually delaying the flight.
    President Moon Jae-in has vowed to curb the power of
family-owned conglomerates and improve their governance
following a corruption scandal involving his impeached
predecessor and business leaders including the chief of Samsung
Electronics Co Ltd  005930.KS .

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 (Reporting by Hyunjoo Jin and Heekyong Yang
Editing by Christopher Cushing)
 ((Heekyong.Yang@thomsonreuters.com; +82 2 3704 5647; Reuters
Messaging: heekyong.yang.thomsonreuters.com@reuters.net))