Hana Tour has been sued for failing to pay ground expenses to its Hong Kong-based partner, Land operator, according to a media outlet report.
Hana Tour acknowledged the information in part, but dismissed the allegation that it intentionally reduced the number of visitors or double book management that was raised together.
"Hana Tour did not pay ground expenses to its partners and even cut the fees it has to pay," a media outlet reported on June 10. "When the partner refused to do so, it reduced the number of travelers and terminated the contract."
Ground expenses are necessary for package tours, such as hotel, transportation and entrance fees for various tours, and local partners will conduct tours there after receiving them from travel agencies.
According to the business partner concerned, the company had signed a contract with Hana Tour to receive travelers from 2010 until last year, but failed to settle accounts properly at every event, resulting in a total of 700 million won in unpaid bills. When asked to settle the unpaid bill, it claimed that Hana Tour intentionally cut the number of travelers and canceled the contract.
Suspicions have also been raised that Hana Tour has a double accounting system that records unpaid bills for performance management. The media outlet reported that the Hana management "manages the dual books" quoting the words of a Hana Tour staff.
"We have confirmed that there are some 270 million won in unpaid bills that must be paid to the company concerned," Hana Tour said. "Hana Tour cannot accumulate 700 million won over eight years because its local partners and employees at its headquarters check the details of the unpaid bills every quarter."
It also strongly denied allegations of accounting fraud through double books, saying, "There is no double account at the company level, and we did not intentionally attempt to manipulate performance. There are some areas that the company has not managed properly, but we have never tried to make unfair or illegal profits."