Scandal-stricken Hanjin Group chairman resigns as Jin Air CEO

Lim Chang-won Reporter Posted : 2018-05-10 18:45 Updated : 2018-05-10 18:45
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[Aju News DB]


SEOUL -- Cho Yang-ho, the head of South Korea's Hanjin Group, resigned as CEO of Jin Air, a low-cost airline run by the group, Thursday amid mounting public criticism of misconduct and arrogant behaviors by his wife and youngest daughter.

Jin Air said in a regulatory filing that Kwon Hyuk-min, a former co-CEO in charge of maintenance, replaced Cho and regained his top post. The change came 49 days after Cho took over Kwon's post in a twin-CEO structure.

"This change is intended to strengthen a responsible management system by professional managers," the budget airline said, adding Cho would keep his seat in Jin Air's board of directors.

The group, which controls Korean Air, the country's flag carrier, has seen its image plunging due to a scandal involving Cho's youngest daughter, Cho Hyun-min, who is an American citizen and uses her English name, Cho Emily Lee.

There have been allegations that Emily threw a glass cup and sprayed plum juice during a business meeting with advertising agency officials on March 16. She told investigators that she lost her temper because the advertising official did not properly answer her questions.

Emily had illegally served as Jin Air's board member for six years from March 2010. Foreigners are not allowed to join a board of directors at flag carriers.

There have been unconfirmed news reports that policymakers at the Ministry of Land, Infrastructure and Transport held discussions on whether to cancel Jin Air's license. After the scandal erupted, Emily was dismissed as Korean Air's executive director and Jin Air vice president.

The scandal sparked a flurry of investigations by police, customs officials and transport authorities into possible illegal activities by Cho's family. There have been a series of revelations by whistle-blowers about misconducts and illegal acts by the ruling family.

Jin Air's first-quarter net profit rose 59 percent on-year to 40.3 billion won (37.3 million US dollars). Operating profit soared 56 percent to 53.1 billion won and sales were up 20.3 percent to 279.8 billion won.