South Korea’s transport ministry will wait on the outcome of a formal hearing before deciding whether to cancel Jin Air’s business licence, after a former board member was found to hold foreign citizenship.
The issue stems from the appointment of Cho Hyun-min to the board of the airline between 2010 and 2016. The daughter of former Jin Air co-chief executive and Hanjin Group chairman Cho Yang-Ho was found to be a US citizen, and thus ineligible under Korean law to hold the board position.
The hearing is expected to take two to three months, and will call on senior executives at the budget carrier to testify on the matter. A separate review into how the transport ministry allowed Cho Hyun-min to sit on the airline’s board will also be held.
Jin Air’s share price fell from W26,550 ($23.81) to W24,550 after the transport ministry’s announcement this afternoon, before recovering slightly to around W25,300.
The carrier has been facing potential heavy fines or the cancellation of its licence after Cho’s citizenship issue arose amid strong scrutiny of various members of the Cho family. Investigations are also underway into allegations of tax evasion by the Cho family in relation to luxury goods, among other alleged legal offences.
An affiliate of Korean Air, Jin Air flies to 25 domestic and international destinations using a fleet of 21 Boeing 737-800s and four 777-200ERs.
Source: Cirium Dashboard