[Editorial] A critical leadership vacuum at KT

Yun Kyoung-lim, the nominee to head the telecommunication major KT, withdrew himself just three days before the March 27 shareholders’ meeting. KT is No. 12 in business rank, with an annual revenue of 25 trillion won ($19 billion).

But the group is still mired in a war of nerves with the government over management affairs. Former CEO Koo Hyun-mo was appointed under the liberal Moon Jae-in administration. But he gave up a bid for another term under pressure from the conservative Yoon Suk Yeol administration. Yun’s withdrawal underscores how the KT management remains under political influence. As Koo’s term ends at the end of March, KT could be doing business without CEO for a while.

Finding the next candidate for the top post is not easy. The government opposed Yun as the new head of KT, not to mention three other candidates shortlisted by the KT board of directors. The government more or less displayed its disapproval of the current KT management, accusing it of being “a cartel group.” While resigning from the nomination, Yun said that the new CEO should be able to improve the governance structure that can exceed the expectations of major stakeholders. Given that Yun’s nomination was approved by minority shareholders and the world’s two most prominent proxy advisers — Glass Lewis and Institutional Shareholder Services — many inside and outside of the company fear that someone handpicked by the governing power could move in soon. In that case, KT would be under political power in place of cartel power.

KT set a poor example of a privatized company. Both the government and KT share accountability. The government has attempted to influence the company, which was privatized 20 years ago. The meddling was explicit. The ruling People Power Party vowed an investigation into Koo and his followers.

The prosecution already embarked on an investigation of them after a conservative civic group had accused them of favoritism toward KT’s affiliates close to Koo and Yun. As prosecutor-turned-president Yoon Suk Yeol has seated prosecutors in major government offices, he could be criticized for mobilizing the prosecution to push out a CEO of a private company.

KT has partly invited its poor state. Yun had tried to recruit figures close to President Yoon in hopes of keeping his newfound seat. But in the end, Yun had to resign after they all shunned taking the top post. Former CEO Koo also recruited figures close to former president Moon Jae-in. Such a collusive practice must come to an end now.