South Korean politicians are considering new legislation aimed at controlling abuses of power and misconduct in family-run conglomerates, and is being nicknamed after Heather Cho, the Korean Airlines next gen whose inflight tantrum in December last year captured international headlines.
The “Conglomerates Ethical Management Special Law” is to be presented in the national assembly this month and will recommend a five-year working ban for high-ranking family members found guilty of criminal conduct. It has been nicknamed the Cho Hyun-ah law.
The proposed legislation follows mounting anger over high-handedness by the rich and powerful, which escalated in December after 40-year-old Hyun-ah (Heather) Cho insisted a plane return to the dock after a steward served her nuts in a bag rather than on a plate. She has since been handed a one year prison sentence for violating air safety laws.
Cho is far from the first member of South Korea’s large family businesses to be caught short of the law, with executives from Hyundai, Hanwha Group and CJ Group among those convicted in the past. Cho’s own father, Cho Yang-ho, was convicted of tax evasion in 2000.
In an interview with Reuters, Saenuri Party lawmaker and sponsor of the bill Kim Yong-nam discussed the proposed legislation: "There have been calls to put in place a systematic tool to police heavy-handedness by chaebol family members, and stop them from being able to participate in management just because they are relatives.”
The lawmaker added that Cho’s sentence is significant because it has broken the so-called “three-five” rule – whereby chaebol chiefs were often sentenced to three years jail, but that would suspended for five years.
Many South Koreans believe that chaebol family members operate above the law, as seen in the 2007 case of Hyundai Motor Chairman Chung Mong-koo, who was spared a three-year jail term for fraud after a court deemed he was too important to the economy.
However, the climate appears to be changing. President Park Geun-hye promised to clamp down on chaebol when she was elected two years ago. In 2013, Kim Seung-youn, chairman of family conglomerate Hanwha Group, was given a four-year jail sentence and $4.5 million fine after being convicted of misusing company funds.
And public sentiment appears to have impacted Cho’s case with some legal experts suggesting the sentence was severe.
A recent survey by the Korea Press Foundation also found that three quarters of the public considered heavy-handed conduct by those in superior positions to be a widespread problem in South Korea, with families of the chaebol topping the list as most likely to be responsible.
A lawyer for Cho has called for the “re-examination of her conviction and jail term”.
Korean Airlines is a subsidiary of Hanjin Group, the conglomerate founded by Cho’s grandfather in 1945.