Prosecutors start investigation of KT CEO and CEO nominee

KT's headquarters in Gwanghwamun, central Seoul [YONHAP]

Prosecutors have launched an investigation of current KT CEO Ku Hyeon-mo and Yun Kyoung-lim, a KT president and nominee to replace Ku as CEO of the telecom giant, over alleged misappropriation of corporate funds and breach of trust.

The investigation follows a civic group’s filing of a complaint alleging that the two unfairly favored KT subsidiary KDFS when choosing a building operator for KT Telecop, a security company 80.79 percent owned by KT.

The Yoon Suk Yeol administration and some lawmakers have blamed KT’s nomination process for lacking transparency, while others see the criticism as an attack intended to replace the company's head with someone who has ties to the current administration.

Shares of KT fell 2.12 percent as of 2:08 p.m. Friday, following the investigation reports.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]