Prosecutors Summarily Indict KT CEO Koo Kyeomoh for 'Split Donations' via Gift Card Discounts... Former Chairman Hwang Changgyu Cleared

KT CEO Koo Hyun-mo is presenting KT Group's media content business strategy at KT Square in Jongno-gu, Seoul, on March 23. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The prosecution investigating KT's alleged 'split donations' to members of the National Assembly summarily indicted KT CEO Koo Hyun-mo on the 4th. Former KT Chairman Hwang Chang-gyu was cleared of charges due to insufficient evidence of conspiracy.

The Economic Crime Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Yoo Kyung-pil) summarily indicted Koo and 10 other KT executives on charges of violating the Political Funds Act and embezzlement, while four others, including former public affairs department head Maeng Mo, were indicted without detention on the same charges.

The prosecution also brought the KT corporation to trial under the principle of corporate liability. However, one executive with relatively minor involvement in the donation activities was granted a suspension of indictment, and four others were not prosecuted.

According to the prosecution, the four executives indicted without detention raised off-the-books funds through a so-called 'gift certificate discount' scheme from May 2014 to October 2017. They paid for gift certificates with company funds and then received 3.5% to 4% of the amount in cash as a discount. These funds were divided into amounts of 1 to 3 million KRW under the names of employees and acquaintances and transferred 360 times to the accounts of political support groups, illegally donating a total of 437.9 million KRW to 99 members of the National Assembly.

They were found to have chosen to split the amounts under individual names to evade the Political Funds Act, which prohibits political donations using corporate or organizational funds.

The prosecution stated that in September 2016, unlike previous offenses, most senior KT executives, including those at the president level, participated in such donations at the request of the external affairs department.

Meanwhile, the prosecution explained that the 10 executives involved, including CEO Koo who lent their names, were summarily indicted based on the degree of involvement and donation amounts according to case handling standards.

Koo, who was a vice president at the time, received off-the-books funds from the public affairs executive and donated a total of 14 million KRW in political funds to the support groups of 13 members of the National Assembly.

Former Chairman Hwang was cleared of charges as it was difficult to prove his involvement in the 'split donations' conspiracy.

Additionally, the prosecution found no evidence to support bribery or embezzlement charges related to political donations, payment of advisory fees, or lawyer fee payments involving some National Assembly members connected to former Chairman Hwang, resulting in no charges.

The prosecution explained the reason for non-prosecution, stating, "Even after analyzing seized materials and testimonies from related parties, no evidence was found that the external affairs department’s off-the-books fund creation and illegal political donations were reported to or properly recognized, directed, or approved by former Chairman Hwang."

After receiving the case from the police in January 2019, the prosecution completed searches of company servers and investigations of about 30 suspects by June this year. Following additional searches of company servers and a recent review of seized materials and existing data, the prosecution made this decision today.

This content was produced with the assistance of AI translation services.