The police's request for a warrant to arrest Hanjin Group Chairman Cho Yang-ho accused of fund misappropriation was rejected by the prosecution on Tuesday. 

Cho, who doubles as CEO of Korean Air Lines Co., is under investigation over suspicion that he siphoned off 3 billion won ($2.6 million) from company funds to pay for his house remodeling expenses between May 2013 and August 2014. Police made the writ request for Cho on Monday on possible charges of breach of trust.

The Seoul Central District Prosecutors' Office said it instructed the police to further investigate the case to substantiate his charges.


He was questioned by police last month. He has denied any wrongdoing, saying he had no knowledge of the misappropriation.

The allegations were raised during a separate police investigation into possible tax fraud by an interior renovation company that works largely for business conglomerates.

In early July, police investigators raided the airline's headquarters in western Seoul and confiscated accounting books and contract documents. (Yonhap)