SEOUL ¨C South Korean prosecutors on Thursday launched a probe into allegations that Korean Air¡¯s CEO and his sister are responsible for a former executive¡¯s taking payments from Airbus in return for buying that company¡¯s aircraft.
This year, Airbus said it would pay a record $4 billion in fines after reaching a plea bargain with prosecutors in Britain, France and United States over accusations of bribery and corruption stretching back at least 15 years.
A French document detailing Airbus¡¯ settlement said Airbus had agreed to pay €15 million ($1.07 million) to a former top Korean Air executive in return for the airline¡¯s purchase of 10 A330 jets under contracts dating from 1996 to 2000, then delivered part of the cash through a fake consulting contract using a middleman.
¡°(Airbus) delivered rebates worth a total of 17.4 billion won on three occasions from 2010 to 2013 to the Korean Air side,¡± the civic group People¡¯s Solidarity for Participatory Democracy said on Wednesday as it reported the allegation to prosecutors.
The civic group said Hanjin Group Chairman Cho Won-tae and his sister, Cho Hyun-ah, directors of Korean Air at that time, should be charged with breach of trust and embezzlement because they were involved in the purchase of aircraft and the payments.
A Seoul Central District Prosecutor¡¯s Office spokesman said the office has launched an inquiry into the matter, without elaborating.
Cho Won-tae and other current Hanjin Group executives said they had nothing to do with the Airbus payments, Korean Air said in a statement, speaking for Cho.
Korean Air has recently requested information from Airbus to check past facts, plans to conduct an internal audit and take legal action if needed, it said.
However, ¡°we will not sit idly by and watch actions that negatively affect the company¡¯s value by defaming the current management without grounds, and we will also seek civil and criminal measures,¡± Korean Air said.
Cho Hyun-ah said in a statement through her lawyer that she was not involved in any illegal decision-making, and will cooperate in clarifying the facts.
The siblings are locked in a proxy fight in Korean Air¡¯s parent firm, Hanjin Kal, before a March 27 annual general meeting, when shareholders will vote on who leads the conglomerate.
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