Investigation opened into KT CEO Ku, CEO nominee Yun

Ku Hyeon-mo, current KT CEO [KT]

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.

KT denied the allegation, saying that it was not involved in the decision-making process to choose the operator.

“KT never stepped in to decide a contractor of KT Telecop or place an order,” KT said in a statement.

The civic group also accused KT of bribing its board directors, a claim denied by the company.

Shareholders are set to decide on the CEO appointment at the annual general meeting on March 31.

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.

Current Chairman Ku was appointed in March 2020 when former President Moon Jae-in was in office.

Ku was initially selected as the final candidate for the CEO post, first on Dec. 16 and again on Dec. 28, after the candidacy was reopened at Ku’s request citing “a major shareholder’s concern.”

Against this contentious backdrop, multiple board directors are leaving their seats apparently to avoid political pressure.

Lim Seung-tae, nominated as an outside director at KT, withdrew his bid Friday without specifying reasons.

Before Lim, Benjamin Hong stepped down as an outside board member earlier this month before his term ended in 2025.

Shares of KT fell 1.96 percent to close at 30,050 won Friday, following reports of the investigation.

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