The Supreme Court of Korea has confirmed a six-year prison sentence for Lee Sang-jik, founder of Eastar Jet (ZE, Seoul Gimpo) and a former politician, convicting him of embezzlement of company funds and breach of trust and for causing billions more in losses at the once-beleaguered low-cost carrier.
Lee was arrested in April 2021 and accused of causing around KRW43 billion won (USD32.1 million) in losses to the airline by underselling shares in the company to a subsidiary owned by his children in 2015.
Separate charges accused him of embezzling KRW5.36 billion (USD4 million) from Easar Jet and its affiliates and using the cash for his or his family’s personal purposes. Prosecutors also said he was responsible for damages at Eastar-related companies amounting to some KRW5.6 billion (USD4.2 million) by arbitrarily raising or downgrading the value of bonds held by them, or by paying off their debts earlier than scheduled between 2016 and 2018.
In January 2022, he was found guilty and sentenced at Jeonju District Court in western South Korea to six years in prison.
Also in its April 27 ruling, the Supreme Court confirmed a three-and-a-half-year prison sentence for a nephew of Lee, referred to during the trial as Mr A, who headed Eastar Jet’s finance team, and a suspended imprisonment of two years for Choi Jong-gu, a former Eastar Jet chief executive. Both were found guilty of collusion.
Lee became an independent politician after leaving the ruling Democratic Party in September 2020 over the scale of layoffs and unpaid wages at cash-strapped Eastar Jet.
Today, the budget carrier is on a new trajectory, backed by private equity firm VIG Partners, with a regained AOC and plans to scale up its fleet.
