Another scandal hits the largest airline and flag carrier of South Korea, and this time it involves the man at the top. Korean Air Lines Chairman and CEO, Cho Yang-ho, is set to stand trial in an embezzlement case as prosecutors say he took millions-of-dollars in fees meant for the carrier by unfairly awarding contracts to family-owned businesses.

The Chairman of Korean Air was indicted on October 15, 2018, for charges including embezzlement, tax evasion and breach of trust.

According to South Korean prosecutors, over a period of five years (from 2013 to 2018) Cho took up to $17.4 million (19.6 billion won) in company funds by setting up a trading company – known as Trion Trading – through which he brokered purchase deals of aircraft equipment and in-flight duty-free goods for the airline, Reuters explains.

Aside of that, the airline’s chief is suspected of taking $134.6 million (152 billion won) in medical care benefits from the National Health Insurance after illegally running a pharmacy without a license (from 2010 to 2014).

South Korean prosecutors, however, had to drop the tax evasion charge amounting to $54 million (61 billion won) over foreign assets due to the expiration of the statute of limitations, or time limits, the Korea Times reports.

The news may not be as big surprise for South Koreans as it is for the global aviation industry. President Moon-Jae-in has pledged to curb the excessive powers of family-owned conglomerates, pervasive in South Korean business culture.

And as for Cho – the airlines’ boss now faces trial, at which time the company will present its facts to the court, a Korean Air spokeswoman was quoted as saying by Bloomberg.

The chief’s indictment comes as his youngest daughter, also on October 15, 2018, was cleared of all charges related to the water-throwing incident earlier this year. Cho Hyun-min allegedly threw a drink at two representatives at a business meeting in March 2018, prompting the South Korean police to launch an investigation for possible assault in April 2018.

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Jin Air, the budget affiliate of Korean Air, may lose its Air Operator’s Certificate (AOC) due to the fallout from an alleged incident involving the daughter of the airlines’ controlling family, who served on the budget carrier's board of directors for six years despite being ineligible for the post, a government investigation has discovered.
 

Meanwhile, the oldest daughter of Korean Air’s boss, Cho Hyun-ah, made her mark in the worldwide media back in 2014, when she was jailed after ordering a Korean Air plane to return to its gate at John F. Kennedy International Airport (JFK) only to kick a flight attendant off the aircraft in an outburst over the way nuts were served.