Hanjin Family Loses First Trial in 14 Billion Won Tax Appeal Lawsuit... "Tax Evasion Recognized"

Former Korean Air Vice President Cho Hyun-ah (left) and her younger brother Cho Won-tae, Chairman of Hanjin Group [Image source=Yonhap News]

[Asia Economy Reporter Kim Daehyun] The Hanjin Group's founding family filed an appeal against the imposition of taxes amounting to approximately 14 billion KRW but lost in the first trial.

According to the legal community on the 3rd, the Seoul Administrative Court Administrative Division 8 (Presiding Judge Lee Jeonghee) recently ruled against the plaintiffs in the first trial of the lawsuit filed by Chairman Cho Won-tae of Hanjin Group, former Vice President of Korean Air Cho Hyun-ah, President of Hanjin Cho Hyun-min, and Advisor of Jungseok Enterprises Lee Myung-hee, who challenged the tax authorities' imposition of gift tax and other taxes.

Earlier, the Seoul Regional Tax Office imposed a total of over 14 billion KRW in gift tax and comprehensive income tax on the Hanjin Group's founding family in 2018. The tax investigation concluded that the late Chairman Cho Yang-ho of Hanjin Group had established a personal business that intermediated the supply of goods in the aviation industry and registered family members as co-operators, thereby transferring company profits. The Cho family filed a lawsuit in February last year to contest this decision.

The court sided with the tax authorities, stating, "The deceased was the actual operator of the intermediary companies, and the transfer of the business profits to the plaintiffs was merely a means to evade taxes from the beginning."

It added, "Although the plaintiffs held significant equity stakes in the intermediary companies, they were unaware of the companies' business activities" and "In fact, they had no involvement in the business at all."

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