BUSINESS

‘Water rage’ scandal escalates into customs probe

By Bae Hyun-jung
  • Published : Apr 20, 2018 - 18:46
  • Updated : Apr 20, 2018 - 18:46
The “water rage” scandal of Cho Hyun-min, youngest daughter of Hanjin Group Chairman Cho Yang-ho, is escalating into an extensive customs evasion investigation involving the entire family, following claims that the high-profile members often abused the group’s signature company Korean Air to “smuggle” personal goods.

Calls are also mounting on the need to reinforce the customs examination process for flight attendants and airport employees, who go through a simpler process at departure and arrival terminals.
 
Prosecutors leave the Korean Air headquarters in western Seoul on Thursday after a seize and search over vice president Cho Hyun-min's power abuse allegations. (Yonhap)

The Korea Customs Service on Friday said that it is currently looking into the credit card details of group chief Cho, his wife Lee Myung-hee, and their three children -- KAL Hotel Network President Cho Hyun-ah, Korean Air President Cho Won-tae, and Korean Air Senior Vice President Cho Hyun-min.

“In case there is a considerable amount of discrepancy between the spending details and the customs payment records and the (Cho family members) fail to clarify the reasons, it may be possible to summon them for face-to-face questioning,” said an official of the customs office.

Circumstantial evidence will be necessary in addition to the numerical inconsistency, the official added, as a simple discordance in amount may not necessarily constitute a breach of customs regulations.

The Customs Act states that purchased goods worth $600 or more are subject to customs declaration. Violators may face a maximum jail sentence of 10 years or a fine of 20 million won ($18,751) and have the corresponding goods confiscated.

The probe came in the wake of a series of whistleblowers’ claims that the Cho family frequently smuggled luxurious goods through employee-only passageways, abusing their position as owner of the nation’s largest air carrier.

“We have been trying to get in direct touch with the corresponding employee (who made the claim), but the person is refraining from going public in fear of career disadvantages,” the official said.

The accusations, though made anonymously via social network service channels, all pointed to the customs clearance-free employees’ passageways as the key smuggling route.

“Airports are not required to deploy a customs officer at these employees-exclusive hallways, which are just wide enough for a single individual to pass through,” the customs office explained.

But small luxurious items such as purses and jewelry may easily be brought in as personal belongings, especially with the help of the air carrier ground crew, the official added.

Recently triggering the power abuse scandal of the Cho family was youngest daughter Hyun-min’s reported assault -- screaming insulting words and throwing water during a meeting -- against an agency official in a fit of rage.

Cho’s elder sister Hyun-ah made headlines last month upon returning to a top position within the group, despite her disgrace and jail sentence for the so-called “nut rage” incident in 2014, in which she ordered a Korean Air plane back to its departure gate amid her fury over the way her in-flight snack was served.

Meanwhile, the total market capitalization by Hanjin Group‘s five listed companies -- Korean Air, Hanjin KAL, Jin Air, Hanjin, and Korea Airport Service -- stood at 5.8 trillion won as of Thursday’s closing, down 5.4 percentage points from last Wednesday, the day before the water rage incident was first reported.

By Bae Hyun-jung  (tellme@heraldcorp.com)

LEADERS CLUB