Korean Air chief indicted for embezzlement

Korean Air’s Cho Yang-ho was charged for embezzling more than 20 billion won ($18 million). (Reuters)
Updated 15 October 2018
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Korean Air chief indicted for embezzlement

  • Prosecutors charged Cho Yang-ho with embezzling more than $18 million and unfairly awarding contracts to family members
  • He is also accused of taking 152 billion won from the state insurance agency in medical care benefits

SEOUL: The head of South Korean flag carrier Korean Air — whose family have been embroiled in multiple scandals including one involving macadamia nuts — was indicted Monday on charges of embezzling tens of millions of dollars and other offenses.
Prosecutors charged Cho Yang-ho with embezzling more than 20 billion won ($18 million) and unfairly awarding contracts to companies controlled by his family members, according to Yonhap news agency.
The super-wealthy owners of chaebols — the sprawling conglomerates that dominate the world’s 11th-largest economy — often attract controversy, but a series of scandals have made the Cho family one of the most notorious in South Korea.
Cho is the chairman of Hanjin Group, which includes Korean Air and used to own the now-bankrupt Hanjin Shipping line.
He was also head of the organizing committee for the 2018 Pyeongchang Winter Olympics until stepping down two years before the Games.
The 69-year-old is also accused of taking 152 billion won from the state insurance agency in medical care benefits by illegally running a pharmacy under a borrowed name.
Initially Cho was accused of evading inheritance tax of around 61 billion won when his father, Hanjin’s founder, died in 2002, but prosecutors said the statute of limitations had expired in 2014.
The date for Cho’s trial was not set and he was not detained ahead of the proceedings.
His two daughters, who held management positions at Korean Air, previously became viral sensations for temper tantrums dubbed the “nut rage” and “water rage” scandals, forcing Cho to issue a public apology and remove them from their posts.
The elder, Cho Hyun-ah, made global headlines in 2014 for kicking a cabin crew chief off a Korean Air plane after she was served macadamia nuts in a bag rather than a bowl. She later served a short prison sentence.
Earlier this year, her younger sister Cho Hyun-min was accused of throwing a drink at an advertising agency manager’s face in a fit of rage during a business meeting. She was not indicted as the victim did not want to press charges.
Their mother, Lee Myung-hee, has been questioned by police several times in connection with allegations of assault against her employees including cursing, kicking, slapping and even throwing a pair of scissors.
Cho himself has already had brushes with the law, receiving a suspended jail sentence for tax evasion in 2000 and awaiting a separate trial for diverting 30 billion won of company funds for renovating his own house.


China’s economy grew at slowest pace in 28 years in 2018

Updated 21 January 2019
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China’s economy grew at slowest pace in 28 years in 2018

  • Growth in the last three months of the year clocked in at 6.4 percent, matching a low seen during the global financial crisis 10 years ago
  • ‘China’s GDP number is not an accurate gauge of economic growth’

BEIJING: China’s economy grew at its slowest pace in almost three decades in 2018, losing more steam in the last quarter as it battles to quell massive debt and a US trade war, official data showed Monday.
The 6.6 percent growth comes in above the official target of around 6.5 percent and matches a forecast by analysts polled by AFP, but is down from the 6.8 percent chalked up in 2017, according to the National Bureau of Statistics (NBS).
And in a sign of the struggle Beijing faces, growth in the last three months of the year clocked in at 6.4 percent, matching a low seen during the global financial crisis 10 years ago, with economists widely expecting the slowdown to deepen.
“Everyone is widely concerned about the direction of the international situation where there are many variables and uncertain factors,” said NBS commissioner Ning Jizhe, noting trade protectionism was in vogue.
“For the world’s second-largest economy, where trade accounts for one-third of GDP, this has an impact,” he said, adding “downward pressure” on the economy has increased.
The slowing growth prompted Premier Li Keqiang last week to vow the government would not let the economy “fall off a cliff.”
Relations with top trading partner the US deteriorated sharply last year after President Donald Trump hit roughly half of Chinese imports with new tariffs in an attempt to force trade concessions.
The trade war is on hold for now after President Xi Jinping and Trump agreed to a three-month cease-fire, with top negotiators set to meet in Washington at the end of this month as a March deadline for a deal looms large.
“China-US economic and trade frictions do indeed affect the economy, but the impact is generally controllable,” said Ning.
While analysts say the standoff has dented confidence — leaving the stock markets battered and the yuan weakened — they attribute most of the downturn to the government policies to tackle growing debt, financial risk and pollution.
China hit the brakes on major projects such as subway lines and motorways and held off on mountain-moving endeavors to keep a lid on debt last year, with infrastructure investment rising by just 3.8 percent, down from 19 percent the year before.
“Growth is falling at an accelerated pace,” Lu Ting, China economist at Nomura, said in a note.
China’s exports to US and the world also fell in December, reinforcing the need for its legions of domestic consumers to fuel the economy.
Li last week touted China’s “massive market” and vowed to spur on consumption, but the data shows difficulty ahead.
Overall credit growth decelerated every month last year.
“The slowdown in credit growth is causing economic momentum to falter,” said Mark Williams, chief Asia economist at Capital Economics, in a note last week.
Slowing disposable income growth and tighter credit has hit consumer spending with car sales falling last year for the first time in more than 20 years.
Retail sales growth slowed to 9.0 percent, down from a 10.2 percent increase the previous year. In December, sales grew 8.2 percent.
Output at factories and workshops ticked up 6.2 percent for the year, down from 6.6 percent in 2017.
The official figures could be painting an overly rosy picture, analysts say.
Economists in China and abroad have long suspected data is massaged upward, often noting that full-year gross domestic product hits Beijing’s pre-set targets with suspicious regularity.
“China’s GDP number is not an accurate gauge of economic growth,” said Raymond Yeung, economist at ANZ bank.
The governor of northeastern Liaoning admitted in 2017 that the industrial province had falsified data for years.
Even Li said in 2007, when he was Liaoning’s top political official, that results were often “man-made” and he used his own calculations to guide provincial policymaking, according to a confidential memo released by WikiLeaks.
“The NBS is part of the government ... that is why it is legitimate for the outside world to worry about potential adjustment of data on the economy,” said Louis Kuijs of Oxford Economics.
The US-based Conference Board, a widely respected global business think tank, said its methodology indicates growth of 4.1 percent for 2018.
On Friday, China revised its 2017 economic growth down to 6.8 percent from 6.9 percent — a move some analysts say may have been aimed at beefing up this year’s growth rate.
“Skeptics will be forgiven for questioning whether NBS is trying to smooth GDP growth by shifting some of the recent weakness into the 2017 figures,” said Julian Evans-Pritchard of Capital Economics in a note.