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Asia300

Korean Air tiptoes around scandals during mixed earnings report

Chairman and father of 'nut rage' heiress under investigation for tax evasion

Masked Korean Air Lines workers demand Chairman Cho Yang-ho's resignation with claims of "gabjil" -- a term for abuses by those in positions of power.   © Reuters

SEOUL -- Korean Air Lines avoided any mention of tax dodging and other allegations engulfing its founding family as the carrier reported a drop in first-quarter profit on Tuesday, a day later than planned.

Consolidated sales climbed 8% on the year to 3.1 trillion won ($2.88 billion) for the three months through March, thanks to improving demand for air travel. But operating profit slumped 13% to 166.3 billion won amid rising labor costs and a weaker South Korean currency.

Cho Yang-ho, chairman of Korean Air as well as its parent Hanjin Group -- one of the country's biggest conglomerates -- is under investigation by South Korean prosecutors over accusations that he failed to report European real estate and deposits inherited from his father, the group's founder.

These are the first of the recent accusations swirling around the family to hit Cho himself. A Korean Air public relations representative said Tuesday that the company cannot comment on an ongoing probe.

Police are investigating allegations that Cho's wife, Lee Myung-hee, physically and verbally abused construction workers building a hotel for a group company. Cho's younger daughter, Cho Hyun-min, has been accused of throwing a cup of water at an advertising agency employee during a meeting. The latter case has been referred to prosecutors.

Immigration authorities have launched a probe into allegations that the Cho family illegally employed Philippine housekeepers. The family also is accused of using Korean Air planes to ship luxury goods to evade customs duties.

Elder daughter Cho Hyun-ah achieved notoriety in 2014 for an angry outburst triggered by an in-flight snack of macadamia nuts, which forced a plane departing New York to return to the gate.

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