Notorious Korean Air sisters resign amid controversy

One was accused of throwing water at the face of an employee. The other ordered a flight turn round after she was served macadamia nuts in a bag.

The head of Korean Air Lines Co. said Sunday that his two daughters had resigned.

The head of Korean Air Lines Co. said Sunday that his two daughters had resigned their positions at the company after an uproar over allegations that they had abused their subordinates.

The move by Cho Yang-ho, the chairman of Hanjin Group and of Korean Air, is an example of one of South Korea’s sprawling family-run conglomerates responding to growing public anger.

On Sunday Mr. Cho, the father of Cho Hyun-min, known as Emily, issued an apology for his daughter’s “immature conduct.” Cho Hyun-min was an executive at South Korea’s flagship carrier. Another daughter and former executive, Cho Hyun-ah, known as Heather, also stepped down. They have departed all posts at the Hanjin conglomerate, effectively immediately, Mr. Cho said. Hanjin Group is one of the country’s biggest conglomerates, and controls Korean Air.

Mr. Cho’s apology comes days after Emily Cho, a vice president at Korean Air, was accused of throwing water at the face of an advertising agency employee during a meeting, sparking a furore. South Korean police have launched a formal investigation into the matter.

Allegations against the family have since snowballed. On Saturday, the Korea Customs Service raided Korean Air headquarters and Mr. Cho’s family residence, seeking evidence that the Cho family used their fleet of planes to bring luxury goods into South Korea without paying taxes.

As part of his apology Sunday, Mr. Cho said Korean Air would create a new vice chairman position to be filled by a non-family member, and would strengthen the board’s role in company operations.

South Korea’s family-run conglomerates, known as chaebols, have faced increasing public scrutiny amid concerns about poor corporate governance and allegations of bad behaviour by the third-generation heirs, many of whom have assumed senior roles at the companies.

The country’s largest conglomerate, Samsung, has responded to public anger by increasing its dividends and streamlining its ownership structure. Third-generation heir Lee Jae-yong was convicted of bribery last year, though he was freed from prison upon appeal. The case is expected to reach South Korea’s highest court.

In the case of Korean Air, Emily Cho, 34, started at her father’s company in 2007 and rose to vice president at Korean Air within a decade. She held six other positions at the airline’s affiliate companies.

Ms. Cho is the younger sister of Heather Cho, who earned international notoriety in 2014 after she ordered a commercial flight with about 250 passengers to return to the gate at New York’s John F. Kennedy International Airport after berating a flight attendant for serving her macadamia nuts in an unopened bag, instead of on a plate. The incident became known as “nut rage.” The elder Ms. Cho was convicted in a South Korean court and sentenced to one year in jail for violating aviation laws. Ten months later, an appeals court acquitted her of one of the charges and released her on a suspended sentence. She returned to work as president of the airlines’ hotel-operations affiliate last month.

The Hanjin Group chairman also has one son, Cho Won-tae, who was reported to have assaulted an elderly woman in 2005 after she chastised him for his driving. He was promoted to president at Korean Air last year.

Wallstreet Journal