By Heekyong Yang
SEOUL (Reuters) - South Korea on Friday announced its decision to not revoke budget carrier Jin Air's (KS:272450) business license, which had been under review after it broke the law with the appointment of a foreign national to its board.
Its shares surged as much as 24 percent on the decision but later pared gains to trade 16 percent higher after the transport ministry said it would restrict the carrier from registering new aircraft and routes for a "certain period of time."
Emily Cho, a member of the family which controls Korean Air Lines Co Ltd (KS:003490) and affiliate Jin Air , holds U.S. citizenship and served as a Jin Air board member between 2010 and 2016.
The airlines and its controlling family have been under fire after Cho allegedly threw water into the face of an advertising agency manager in an angry outburst earlier this year.
The incident sparked probes into her family and its businesses by various government agencies and prosecutors. Cho and older sister Heather Cho, who was jailed for delaying a flight after objecting to the way nuts were served, no longer hold any positions at Korean Air, Jin Air or affiliates.
"The ministry factored in concerns about the employment of Jin Air's employees, the potential inconvenience to customers and losses for investors as well as the development of the domestic aviation industry," the ministry said in a statement.
Jin Air said in a statement it welcomed the decision to not revoke its license.