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| Members of the pilot union of Eastar Jet stage a protest in front of the budget carrier's head office in Seoul, June 26, calling on Rep. Lee Sang-jik of the ruling Democratic Party of Korea, who is the firm's founder, to take responsibility for financial difficulties facing the company and unpaid wages for its workers. / Yonhap |
By Jun Ji-hye
Eastar Jet founder Lee Sang-jik, who is also a lawmaker of the ruling Democratic Party of Korea, is facing mounting criticism from company employees, even after a decision made by the founding family members to contribute all their shares to "save" the debt-ridden budget carrier.
The pilot union of the low-cost carrier claimed Rep. Lee was pretending to sacrifice himself and the owner family for the benefit of the company, but in fact, he was evading responsibility for financial difficulties and unpaid wages for workers amid growing uncertainty over a plan by Jeju Air to take over Eastar Jet.
On Monday, Rep. Lee announced that his family will "donate" their entire 38.6 percent stake, worth around 41 billion won ($34 million), to the troubled company.
"It was a difficult decision for us, but we thought we should save the company even if it demanded our sacrifice," Lee said in a statement that was read in his absence by senior Eastar Jet official Kim Yoo-sang during a news conference in Seoul.
Lee's son and daughter collectively own the 38.6 percent stake in Eastar Jet through the firm's holding company, Eastar Holdings. The daughter who is the CEO of Eastar Holdings holds a 33.3 percent stake in the company, while the son holds 66.7 percent.
Lee's announcement came amid a growing controversy over Eastar Jet's unpaid wages for its workers totaling about 24 billion won, following the outbreak of COVID-19.
In March, Jeju Air signed a deal with Eastar Holdings to acquire a controlling 51.17 percent stake in Eastar Jet for 54.5 billion won, but the procedures to complete the acquisition have since made slow progress as the two companies have been at odds over who should shoulder the responsibility for the unpaid wages during their negotiation.
"We respect the decision made by the owner family. The only way to save the company now is Jeju Air's takeover," said Eastar Jet CEO Choi Jong-gu, who was present at the news conference, urging the nation's largest budget carrier to hurry the acquisition process with sincerity.
But the news conference was not welcomed by the Eastar Jet union as well as Jeju Air.
The union said Lee had fallen short of explaining the detailed plan regarding the contribution of the shares held by family members, aggravating the confusion. It added Lee also failed to unveil his plan to resolve the wage issues.
"Lee did not even make an apology. He just threw the stakes into Eastar Jet to avoid the responsibility," said Park Ea-sam, head of the union. "The government should launch its investigation into Lee and his family."
Besides the wage issues, the founding family members of Eastar Jet have been facing a controversy over a suspicion that Eastar Holdings acquired its stocks in the budget carrier through non-legitimate measures.
The pilot union is planning to file a complaint with the prosecution against Lee and his daughter for alleged embezzlement and breach of trust.
Meanwhile, Jeju Air said Eastar Jet held a press conference abruptly without prior consultation and announced the decision that would change the party in the contract from Eastar Holdings to Eastar Jet.
"Eastar Jet has never made an official request. We will review the issue when it does," a Jeju Air official said.
