Andrzej Jeziorski/SINGAPORE
South Korean police have arrested Korean Air (KAL) chairman Cho Yang-Ho on charges of tax evasion and embezzlement.
Cho was arrested on 11 November. Prosecutors have reportedly charged him with evading 62.9 billion won ($54 million)of taxes and embezzling billions of won in company funds.
The prosecutors allege that Cho took a large part of millions of dollars in aircraft order rebates from Airbus Industrie and Boeing for his private use between January 1994 and December 1998. They have also been investigating his younger brother and president of Hanjin Shipping, Cho Su-ho, and his father, Cho Choong-Hoon, the former KAL chairman and founder of the Hanjin Group which controls the airline.
In October, the South Korean National Tax Administration announced that Hanjin Group affiliates and members of the Cho family had failed to register over 1 trillion won ($845 million )of taxable income.
The Administration is seeking a punitive fine of hundreds of millions of US dollars, making it the biggest tax evasion case in the country's history.
Tax officials announced in October that they suspected billions of won had been directed into slush funds used to bribe politicians, and that the family had redirected millions of dollars into a KAL subsidiary called KALF - a paper company established tax-free in Ireland. According to the South Korean press, the arrest warrant against Cho made no mention of these allegations.
Source: Flight International
