Korean Air chief appears for questioning over suspected tax evasion

SEOUL (Reuters) - Korean Air Lines Chairman Cho Yang-ho appeared on Thursday at the prosecutor's office for questioning over allegations of tax evasion and other financial crimes, as South Korea's family-owned conglomerates face growing scrutiny.

"I will tell the prosecutors everything," 69-year-old Cho Yang-ho said before entering the prosecutors' office in Seoul, as protestors called for his arrest.

An angry outburst at a business meeting by Cho's youngest daughter, Cho Hyun-min, sparked public outrage at alleged abuse of power by South Korean family-owned conglomerates, or chaebols, leading to investigations of several of his family members.

South Korea's President Moon Jae-in has pledged to curb the excessive power of chaebols and improve their governance following a corruption scandal involving his impeached predecessor and the chief of Samsung Electronics .

"It seems that the government is using the Korean Air controversy to tame major chaebols like Samsung and Hyundai," said Park Ju-gun, head of corporate analysis firm CEO.

Cho is facing charges of tax evasion, breach of trust and embezzlement, a prosecution official said.

Korean Air Lines declined to comment.

The junior Cho was under a storm of public criticism for allegedly throwing a drink at a business meeting attendee.

She is the younger sister of Heather Cho, who was jailed in 2014 for demanding a Korean Air Lines plane return to its gate at a New York airport due to the way she was served nuts in first class.

The chairman has publicly apologised and had his daughters step down from their positions at the airline and its affiliates, while he also quit his position as chief executive at budget affiliate Jin Air .

Shares of Korean Air fell 2.7 percent, and Jin Air was down 1.6 percent compared to a 0.9 percent fall in the broader market as of 0055 GMT.

Korean Air shares have fallen 21 percent since April when the controversy first erupted, while Jin Air has tumbled 21 percent, lagging the wider market's 4 percent fall.

(Reporting by Joyce Lee, Writing by Hyunjoo Jin; Editing by Stephen Coates)