Founder of Eastar Jet, Democratic Party's Lee Sang-jik's Children's Equity Value Soars from 30 Million Won to 16.8 Billion Won

Members of the Eastar Air Pilots Union of the Korean Public Service and Transport Workers' Union under the Korean Confederation of Trade Unions held a press conference on the 29th at the Southern District Prosecutors' Office in Yangcheon-gu, Seoul, to file a complaint against Lee Sang-jik, a member of the Democratic Party of Korea, and his family. Considering the ongoing uncertainty surrounding the M&A, they had been weighing the timing, but following the final cancellation of the Stock Purchase Agreement (SPA) with Jeju Air last week, they decided to report to the prosecution on suspicions of illicit succession involving his children and various paper company allegations. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Park Cheol-eung] The value of unlisted shares held by the children of Lee Sang-jik, founder of Eastar Jet and a member of the Democratic Party of Korea, was reported to be 16.8 billion KRW. Lee gifted the shares to his children, and there are suspicions of tax evasion during this process.

According to the asset disclosure details released by the National Assembly Public Officials Ethics Committee on the 28th, Lee's total assets amount to 21.267 billion KRW. Among these, the value of unlisted shares of Eastar Holdings held by his eldest son and eldest daughter was reported as 16.85 billion KRW, with the eldest son holding about 11.2 billion KRW and the eldest daughter about 5.6 billion KRW.

Previously, the reported amount was only 30 million KRW in total (20 million KRW and 10 million KRW respectively), which was explained as an "increase due to a change in the valuation method of unlisted shares."

Eastar Jet, which is currently seeking resale after Jeju Air withdrew from acquisition, is reportedly planning large-scale layoffs. Eastar Holdings is the largest shareholder with a 39.6% stake in Eastar Jet.

People’s Solidarity for Participatory Democracy (PSPD) alleged that Lee gifted shares to his children through a paper company called Eastar Holdings and that tax evasion occurred during this process. They requested the National Tax Service (NTS) in early last month to "thoroughly review the matter to restore economic and tax justice." The NTS is currently reviewing this as a tip-off regarding tax evasion and has accepted the request for a tax investigation.

In their investigation request, PSPD stated, "There is a high possibility that Lee indirectly supported his children’s acquisition funds for Eastar Jet shares through low-price sales of Eastar Jet stock, loans via private equity funds, and advance payment support methods," adding, "This appears to violate the Inheritance and Gift Tax Act, resulting in tax evasion."

Lee issued a statement at the end of June, saying, "The process and procedures for Eastar Holdings’ acquisition of Eastar Jet shares were lawful, and the related taxes were properly paid," but also apologized, saying, "If there were any shortcomings in meeting the public’s expectations, I sincerely apologize. My family has decided to donate all Eastar Jet shares owned through Eastar Holdings to the company."

However, the Eastar Jet Pilots Union and the Korean Public Service and Transport Workers' Union (KPTU) filed a criminal complaint against Lee at the Seoul Southern District Prosecutors' Office at the end of last month. The unions stated, "We are accusing him of creating a paper company for the purpose of tax evasion, making illegal gifts, and intentionally omitting asset declarations in the 21st general election (charges of tax evasion and false statement under the Public Official Election Act)."

This content was produced with the assistance of AI translation services.