Hanjin head escapes detention in police probe into house remodeling

By Lim Chang-won Posted : October 18, 2017, 09:17 Updated : October 18, 2017, 09:17

[Photo by Yoo Dae-gil = dbeorlf123@ajunews.com]


The patriarch of South Korea's Hanjin Group escaped detention after state prosecutors rejected a police move to seek an arrest warrant for him over alleged misappropriation of company funds to renovate his residence.

Prosecutors asked police investigators Tuesday to collect firm evidence as the case was watched closely by South Korea's business community which saw the surprise arrest in February of Jay Y. Lee, the de facto leader of the country's largest conglomerate, Samsung Group, for his role in a corruption scandal.

Cho, who controls South Korea's flag carrier, Korean Air Lines, is suspected of embezzling company money to remodel his Seoul home between May 2013 and August 2014. He has denied any wrongdoing, but police requested an arrest warrant for him and an unnamed group executive.

Cho's arrest would seriously hurt the image of Hanjin Group, which has been at the center of controversy and criticism over Hanjin Shipping, a key affiliate which used to be South Korea's largest container carrier.

In May last year, Cho resigned as chief organizer of next year's Winter Olympics in the eastern ski resort of Pyeongchang after a liquidity crisis battered Hanjin Shipping, which had been kept afloat with an injection of money from its largest shareholder, Korean Air, and other units.

Hanjin Shipping filed for court receivership last year, triggering chaos in its global cargo traffic. In February this year, the carrier was finally liquidated under a sweeping government-led program to restructure South Korea's ailing shipping and shipbuilding sectors.

South Korea's family-run conglomerates, known as chaebol, have been on guard since President Moon Jae-in took office in May and vowed to stop chaebol's unfair business activities.

Like other tycoons, Cho has taken preemptive steps to enhance corporate governance. The Cho family has controlled the group through a complex web of cross-shareholdings.

 
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