Goo Hyun-mo Finally Falls... The Continuing Ordeal of KT CEOs

KT CEO Koo Hyun-mo Declares He Will Not Seek Reappointment
Seems Unable to Withstand Political Turbulence
How Have Previous KT Leaders Fared?

[Asia Economy Reporter Kang Nahum] KT CEO Koo Hyun-mo has decided not to seek reappointment. Many view his resignation as a result of being unable to withstand political pressures, including pressure from the largest shareholder, the National Pension Service. His decision not to pursue reappointment has also brought renewed attention to the 'ordeal history' of past KT leaders.

As of the 23rd, since KT's privatization, there have been five CEOs: Lee Yong-kyung (2002?2005), Nam Joong-soo (2005?2008), Lee Seok-chae (2009?2013), Hwang Chang-gyu (2014?2020), and Koo Hyun-mo (2020?present).

Among them, only Chairman Hwang Chang-gyu successfully completed his full term after reappointment. However, it is reported that even he faced strong pressure to resign during his tenure. In 2018, while holding an opening ceremony for the promotional center related to the 5G mobile communication pilot service to be showcased at the Pyeongchang Winter Olympics at Gangneung Olympic Park, the police suddenly raided the KT headquarters. This led to speculation that the 'higher-ups' might have been hoping for Chairman Hwang's resignation.

Other CEOs also ended their terms poorly, to the extent that their histories could be described as 'cruel.' Nam Joong-soo, who was an internal KT executive, succeeded in being reappointed but was arrested in November 2008 during his second term on charges of breach of trust and immediately stepped down from his position. Chairman Lee Seok-chae also resigned in November 2013 when the prosecution's investigation into breach of trust intensified. Both CEOs share the commonality of stepping down within less than a year after a new government took office.

Koo, who himself wished to be reappointed, also faced significant legal risks. From 2014 to 2017, he is on trial for allegedly creating slush funds amounting to approximately 1.15 billion KRW through a scheme involving purchasing and reselling gift certificates ('gift certificate fraud') and illegally donating 437.9 million KRW to 99 members of the 19th and 20th National Assembly. Earlier this year, he received a summary order for a fine of 15 million KRW but has appealed the decision. This fact was a major argument used by the largest shareholder, the National Pension Service, to oppose Koo's reappointment.

KT has been privatized for 21 years this year but has faced turmoil every time the government changes. Without an owner, the CEO position at KT has been treated like spoils of the newly established government, and every replaced individual has faced parachute appointment controversies.

Many view the recent KT CEO replacement process as a repetition of previous situations. At the end of last year, the National Pension Service declared a strengthening of the stewardship code and explicitly opposed Koo's reappointment, while President Yoon Suk-yeol also directly criticized Koo by mentioning issues related to fair governance in widely held companies.

Ultimately, KT, which had effectively confirmed Koo's reappointment, reset the CEO appointment process twice, causing delays in personnel and organizational restructuring and ongoing internal confusion. These events occurred less than a year after the Yoon Suk-yeol administration took office.

The fact that most candidates who applied for the KT CEO public recruitment have pro-government leanings adds weight to this perspective. Former KT Networks Business Division Head Kwon Eun-hee, former Ministry of Foreign Affairs and Trade Trade Negotiation Headquarters Director Kim Jong-hoon, Kim Sung-tae, an advisory member of the Presidential Digital Platform Government Committee, and former Minister of Industry and Resources Yoon Jin-sik are all former ruling party lawmakers. Former KTF Vice President Kim Ki-yeol was active in President Yoon Suk-yeol's campaign.

Amid political pressures and industry analyses suggesting that a pro-government external figure is likely to be appointed, it appears that whoever takes the CEO position will not escape parachute appointment controversies.

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