Tax office probes Jin Air over possible evasion

Korea’s tax office is investigating Jin Air over potential tax evasion, the latest in a series of investigations into Hanjin Group’s founding family members over alleged wrongdoings, industry sources said Monday.

The tax probe came days after the transportation ministry last week said it has decided not to revoke Jin Air’s business license, ending weeks of uncertainty for the low-cost affiliate of Korean Air. The company appointed a foreign national to its board of directors, a violation of Korean aviation law.

In the interest of national security, only Koreans are permitted to serve as directors of commercial airlines.

The company, however, appointed Cho Hyun-min, an American citizen and the younger daughter of Hanjin Group Chairman Cho Yang-ho, to serve as a board member of Jin Air between 2010 and 2016.

The tax probe centers on whether a severance payment to Hyun-min was acceptable and whether the airline gave undue favor to the Cho family through its in-flight duty-free goods operation.