The stock prices of Korean Air Lines Co. and Jin Air Co. crashed from April 12 after Cho Hyun-min, the youngest daughter of Hanjin Group Chairman Cho Yang-ho, was alleged to have thrown water onto the face of an agency manager in a fit of anger. The stocks rallied in the past two days before plummeting again with the news that the police searched Cho's office.
The price of Korean Air Lines shares fell after the prosecution raided its headquarters last year but it recovered soon as an increasing number of investors bought the stocks at a lower price. It also showed a temporary drop when Cho Hyun-ah, the eldest daughter of the group chairman, was involved in a power abuse scandal called “nut rage” in 2014 but it bounced back in two months.
According to the main bourse operator Korea Exchange (KRX), Korean Air Lines closed at 33,400 won (US$31) on April 19, down 2.91 percent from the previous day, while Jin Air and Hanjin KAL Corp. saw their stock prices decrease 4.38 percent to 30,600 won (US$29) and 2.38 percent to 22,550 won (US$21), respectively. The combined market capitalization of Korean Air Lines, Jin Air and Hanjin KAL stood at 5.42 trillion won (US$5.1 billion) on the same day, down 750 billion won (US$706.21 million) from 6.18 trillion won (US$5.82 billion) on the 11th. In short, the younger Cho’s “water rage” cost more than 700 billion won (US$659.13 million).
Individual investors net purchased 11.8 billion won (US$11.11 million) worth of Korean Air Lines’ shares on the KOSPI on the 12th and bought an additional 12.4 billion won (US$11.68 million) worth of the stocks again after the price nosedived with the news of search and seizure. Foreign investors net sold 2.61 billion won (US$2.45 million) worth of Korean Air Lines’ shares on the 12th but continued to show a straight purchase from the 13th to the 19th.