Founder of South Korea’s Eastar Jet, Lee Sang-jik is sentenced to six-year prison term by the Supreme Court of Korea for embezzlement of company funds and breach of trust and losses. He was arrested in April 2021. In January 2022, he was found guilty and sentenced to six years of prison term by Jeonju District Court in western South Korea. Supreme Court has withheld the district court’s judgement.
Lee was accused of underselling shares of Eastar Jet to a subsidiary owned by his children in 2015. This transaction led to a loss of $32.1 million for the airline.
Lee is also accused of embezzling $4 million from Easar Jet and its affiliates for his personal use. He was responsible for damages at Eastar-related companies amounting to $4.2 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.
The Supreme Court, in the April 27 ruling confirmed three-and-a-half-year prison term for Lee’s nephew who was the head of finance at Eastar and Choi Jong-gu, a former Eastar Jet chief executive. Both were found guilty of collusion.
As of now Eastar is on a new path with backing from its new parent VIG Partners. The airline has regained its AOC and planning to revamp and expand its operations.