Eastar Jet Cleared of False Accounting Charges... Ministry of Land, Infrastructure and Transport Expresses Regret Over Police Decision

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In response to the police's decision to dismiss charges regarding allegations that Eastar Jet submitted false accounting data to obtain its license, the Ministry of Land, Infrastructure and Transport (MOLIT) expressed regret and stated it will strictly review whether to allow the resumption of flights.

On the 17th, MOLIT announced, "We have been notified by the Seoul Metropolitan Police Agency that the investigation request concerning obstruction of official duties by deception related to the issuance of Eastar Jet's license change has been dismissed (no charges filed)."

MOLIT expressed regret over the Seoul Metropolitan Police Agency's decision, stating, "We find it difficult to agree with the police's judgment that financial status review is not mandatory during the license change examination for the representative."

MOLIT emphasized, "This case is not a simple representative change but a license change application submitted by an airline that had suspended operations for a long period since March 2020 due to business deterioration and underwent rehabilitation procedures," adding, "It is essential to thoroughly review whether Eastar Jet, acquired by a third party, possesses sufficient financial soundness to guarantee aviation safety."

MOLIT also maintained its previous stance, saying, "It is difficult to exclude suspicion that Eastar Jet's management intentionally tried to conceal the state of complete capital erosion."

Regardless of the police's judgment, MOLIT stated it will issue an order to improve Eastar Jet's financial structure and said, "We plan to thoroughly review whether Eastar Jet has taken measures sufficient to guarantee aviation safety and will strictly examine whether to permit the resumption of flights."

Earlier, on July 28, MOLIT held a briefing and announced, "There are suspicions that Eastar Jet deliberately submitted false data to MOLIT, obstructing the ministry's licensing work for air transportation business," and declared it would request a police investigation into Eastar Jet.

At that time, MOLIT claimed that Eastar Jet submitted accounting data showing retained earnings (deficit) of -199.3 billion KRW, indicating no capital erosion, and was issued a license change on December 15 last year. However, the audit report disclosed in the Financial Supervisory Service system in May this year showed a deficit of -485.1 billion KRW as of the end of December 2021, indicating a state of complete capital erosion, which raised concerns.

Eastar Jet explained that it submitted data as of May 31, 2020, due to an accounting system 'shutdown,' but MOLIT rejected this explanation, stating that accounting data as of February 4 last year also existed.

Meanwhile, Eastar Jet's issuance of the Air Operator Certificate (AOC) was suspended due to the police investigation, resulting in an indefinite delay in the resumption of its flight operations.