'Ilgam Molaeju-gi' Turns into 'Political Lobbying'... Prosecution's Imminent Summons of KT's Koo Hyun-mo

KT Group's alleged 'preferential allocation of work' has entered a new phase with an intensive investigation by the prosecution. The suspicion that certain subcontractors were favored with work and that group executives gained unfair profits is showing signs of expanding into a 'political lobbying' case as the prosecution recently uncovered new evidence. The summons of former KT CEO Koo Hyun-mo, expected as early as this week, is anticipated to be a critical turning point in the investigation.

Former KT CEO Koo Hyun-mo [Photo by Yonhap News]

According to the legal community on the 10th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) received emails, corporate card records, and other documents from KT subcontractor KDFS (in charge of facility management) and KDFS CEO Hwang Wook-jung, who had been receiving concentrated work orders, and while analyzing the flow of funds, reportedly detected that CEO Hwang had long supported a fundraising group of a certain lawmaker affiliated with the Democratic Party of Korea.

The lawmaker in question is said to be one of the recipients of so-called 'split donations' made by KT to many members of the National Assembly between 2014 and 2017. The prosecution is investigating with the possibility in mind that CEO Hwang supported the fundraising group to lobby political figures. Both the lawmaker and CEO Hwang reportedly deny these allegations. However, legal circles expect that the prosecution will expand its investigation, as it appears likely that KT Group, beyond CEO Hwang’s personal intentions, used subcontractors to conduct 'political lobbying' at the group level.

For now, the prosecution is accelerating the investigation by consecutively summoning high-ranking officials who can decide on group matters regarding the core 'preferential allocation of work' allegations. After this phase of the investigation is somewhat concluded, the prosecution is expected to shift its focus to the 'political slush fund' case.

On the 3rd, the prosecution simultaneously summoned Park Jong-wook, KT’s Head of Management Planning Division (President) and Acting CEO, as a witness, and CEO Hwang as a suspect for questioning. This is the first time a president-level official at the headquarters has been investigated by the prosecution. Park is regarded as a 'number two' figure, having concurrently served as Head of Management Planning and Chief Safety and Health Officer under former CEO Koo. He took over as acting CEO after former CEO Koo declined to seek reappointment this year and even former division head Yoon Kyung-rim, who was a candidate for the next CEO, resigned.

KT Group’s 'preferential allocation of work' allegation concerns the change in work order issuing companies from KT Estate to KT Telecop after former CEO Koo’s appointment in 2020, and the concentration of work orders to KDFS. KT Telecop, which became the issuing company, is suspected of funneling work orders previously divided among four subcontractors?KDFS, KSmate, KFnS, and KSNC?solely to KDFS.

The prosecution is investigating on the premise that the profits generated by KDFS during this process were provided as a kind of slush fund to current and former key executives of KT Group, known as the 'interest cartel.' They are also examining allegations that former KT CEO Nam Joong-soo appointed his wife as a nominal advisor to KDFS and received advisory fees, and that CEO Hwang attempted to destroy evidence by circulating false confirmation letters among employees claiming they received 'hundreds of thousands of won as a service fee' while touring regional headquarters.

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