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| Independent lawmaker Rep. Lee Sang-jik / Korea Times photo by Bae Woo-han |
By Kim Bo-eun
Eastar Jet has cleared former shareholders as it takes steps according to its restructuring plan approved by a Seoul Court earlier this month.
The Seoul Bankruptcy Court earlier this month approved the budget carrier's restructuring plan, enabling property developer Sung Jung to proceed with its planned acquisition.
Sung Jung on Nov. 5 acquired 100 percent of Eastar Jet's shares via a capital increase. Existing Eastar Jet shares were retired in the process, which means the 202.3 billion won worth of Eastar Jet shares owned by Eastar Holdings was stripped of financial value. This means company founder Rep. Lee Sang-jik and his family members will not be paid for the takeover of the air carrier.
Lee had controlled management of the budget carrier via Eastar Holdings that owned 41.65 percent of shares. Eastar Holdings' shares were wholly owned by Lee's son and daughter.
Lee is currently on trial over allegations of embezzlement and breach of trust. Prosecutors on Thursday sought a 10-year prison term for Lee, during a hearing at the Jeonju District Court.
Lee was indicted in February for allegedly generating 43 billion won ($36.02 million) in financial damage to Eastar Jet by paying off long-term loans early and underselling company shares to affiliates, from 2015 to 2018.
Lee, formerly a member of the Democratic Party of Korea, left the ruling party in September last year as controversy brewed over management issues at Eastar Jet, including unpaid wages and mass layoffs. He currently remains an independent lawmaker.
Eastar Jet is expected to apply for an air operator certificate (AOC) to be able to launch domestic flights early next year. It plans to operate two of its 787-800 passenger planes and lease another for domestic flight operations. The airline company's AOC lost effect after it suspended all flight routes in March last year.
