The scandal of the owner family has spilled over to the group and flagship company with prosecutors raiding headquarters of Korean Air Lines Co. on Thursday on multiple criminal charges including tax evasion and embezzlement while its second-largest shareholder, National Pension Fund, threatens to confront the management.

About 30 investigators searched the headquarter office of the nation’s flag carrier located in western Seoul upon a complaint filed by the National Tax Service accusing the family of Hanjin Group chairman Cho Yang-ho of underreporting their inheritance of overseas assets from Cho’s late father Cho Choong-hoon.

Prosecutors raided Hanjin Group’s office building in central Seoul last week and some of the group affiliates this week, suspecting the Cho clan of embezzling corporate funds worth 20 billion won ($18.6 million).

The police filed a warrant to arrest Cho’s wife Lee Myung-hee for habitual physical and verbal abuse towards household and corporate staff from August 2011 to March this year.

She was questioned by police twice this week for 15 hours and 11 hours based on testimonies from 11 victims.

The NPS, the country’s heavyweight institutional player that owns 12.45 percent of Korean Air, demanded the management of the national flag carrier to come up with remedial actions on the harms on the company - the undermined stock value and reputation - from the excesses of the owner family.

Shares of Korean Air ended Friday 0.16 percent higher at 32,000 won.

The Cho clan came under an all-around probe by authorities after its monarch-like behaviors triggered public outrage and even candlelight vigil rallies from employees.

Cho Hyun-min, Lee’s youngest daughter and former vice president of Korean Air, was questioned over the allegation that she threw a cup of water at an advertising executive in an angry outburst. Cho Hyun-ah, her older sister, was also interrogated by the immigration authority for her illegal hiring of Filipino housekeepers. In 2014 she served nearly a year in prison for violation of airline safety laws after forcing a plane to return to the gate because she was upset with the way her nuts were served. Their mother was charged of habitually abusing her household staff and throwing tantrums.

By Moon Ji-woong and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]