KT CEO Koo Hyun-mo Fined 7 Million Won in First Trial for 'Split Donations'

Former KT CEO Koo Hyun-mo was sentenced to a fine in the first trial for his involvement in creating slush funds through the so-called 'gift certificate laundering' method and illegally providing political donations to members of the National Assembly.

On the 5th, Judge Kim Sang-il of the Seoul Central District Court Criminal Division 1 sentenced former CEO Koo, who was indicted for violating the Political Funds Act, to a fine of 7 million won, stating, "Considering various circumstances and evidence, all charges are recognized as guilty." Ten KT officials indicted together were each fined between 3 million and 4 million won.

Former KT CEO Koo Hyun-mo [Image source=Yonhap News]

Judge Kim stated, "When a corporation, which is socioeconomically superior and has strong financial mobilization power compared to individuals, donates political funds, the corporation's interests are relatively overrepresented, which can infringe upon and damage the principles of democracy," and added, "KT is a large corporation engaged in information and communication businesses emphasizing public interest, and thus is held to a high standard of compliance management. However, the defendants significantly undermined public trust by donating political funds to lawmakers with whom they had vested interests."

Earlier, the prosecution indicted KT employees on charges of purchasing gift certificates from May 2014 to October 2017, reselling them to create slush funds worth approximately 1.15 billion won, and splitting donations totaling 437.9 million won to 99 lawmakers from both ruling and opposition parties of the 19th and 20th National Assembly sessions.

It was also investigated that 10 current and former KT executives participated in the crime by lending their names to the executive in charge of government relations at the time. Under former CEO Koo’s name, donations amounting to 14 million won were transferred to 13 lawmakers.

Under the Political Funds Act, the annual donation limit an individual can contribute to a lawmaker’s support committee is 5 million won. Additionally, corporations or organizations are prohibited from donating political funds, and providing political funds using money related to corporations or organizations is also forbidden.

At the last closing argument hearing, the prosecution requested the court to impose a fine of 10 million won on former CEO Koo. The defense appealed for leniency, asking the court to consider KT’s unique characteristics as a private company privatized 20 years ago but still difficult to escape external influence.

The separate case involving former CEO Koo’s embezzlement charges is currently undergoing first trial proceedings at the same court.

Meanwhile, a former KT executive in charge of government relations received a suspended prison sentence. KT as a corporation, indicted under the joint penalty provision, was fined 10 million won in both the first and second trials and has appealed, awaiting the Supreme Court’s decision.

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