Cho sisters accused of using Korean Air to smuggle goods

The Korea Customs Service said Wednesday that it is looking into allegations that Korean Air’s Cho family illegally imported luxury goods to Korea without paying customs duties.

According to the customs agency, it is currently looking into whether the allegations have any factual basis before starting a formal investigation of the case.

Multiple media outlets reported that Hanjin Group’s two heiresses - Cho Hyun-ah, infamous for the 2014 “nut rage” incident where she ordered a Korean Air flight back to its gate because her macadamia nuts were served in a bag, and Cho Hyun-min, who is currently being investigated by police over allegations she threw a cup of water at advertising executives last month - regularly dodged customs taxes after buying luxury goods worth millions of won outside Korea.

The media reports quoted an anonymous Korean Air employee who said that the family had Korean Air officials at overseas offices purchase luxury goods for them. These goods were then flown to Korea on Korean Air planes and carried out of the airport by airline employees, bypassing local customs.

The source claimed that the products brought into Korea ranged from name-brand bags to food and even furniture.

The law stipulates that anyone bringing in an item worth more than $600 must report it to the customs office. Many items that the Cho family smuggled in are thought to be worth much more than $600. One luxury bag reportedly had a price tag of $5,000.

The list of accusations against the Cho family continue to pile up after Cho Hyun-min made headlines by throwing water at an advertising firm employee in a fit of rage earlier this month. The Blue House made an official statement on Wednesday.

“The basic criterion for judging whether an action is corrupt is how the public perceives the issue,” President Moon Jae-in said during a briefing with reporters. “The public today does not condone anyone despising others or making unreasonable orders using their power.”

The Cho family became a symbol of chaebol owner families’ power abuse long before Cho Hyun-min started throwing water around a meeting room. Her older sister Cho Hyun-ah made headlines as recently as last month when she controversially returned to a prominent managerial position in Hanjin Group. She had been jailed for 10 months following the incident in 2014.

The market cap of major Hanjin Group subsidiaries plummeted over the past week.

The market capitalization of Korean Air stood at around 3.40 trillion won ($3.19 billion) April 11, a day before the most recent scandal broke.

The share price of the airline fell by about 4 percent as of Wednesday and the market cap of the company fell by over 200 billion won to around 3.27 trillion won, according to data from the Korea Exchange.

The combined market cap of five major subsidiaries listed on the Kospi - Korean Air, Hanjin Kal, Jin Air, Hanjin, and Korea Airport Service - fell from 6.1 trillion won on April 11 to around 6 trillion won as of Wednesday.

BY CHOI HYUNG-JO, KIM JEE-HEE [choi.hyungjo@joongang.co.kr]