Prosecutors Raid KT's Koo Kyeom-mo and Nam Joong-soo Over 'KT Work Allocation'... Launch Investigation into Higher-Ups (Comprehensive)

The prosecution investigating KT's suspected preferential treatment of orders launched a search and seizure operation targeting current and former top executives of the KT Group on the 20th, signaling the start of an investigation into higher-ups.

View of the KT Gwanghwamun building in Jongno-gu, Seoul. [Image source=Yonhap News]

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) sent prosecutors and investigators to more than 10 locations, including the residences and offices of former KT CEOs Koo Hyun-mo and Nam Joong-soo, on the morning of the same day to secure related materials on charges of violating the Fair Trade Act and the Subcontracting Act. Park Jong-wook, Head of KT's Management Planning Division (President) and Acting CEO, as well as Hong Mo, head of the Real Estate Business Unit, were also included in the search and seizure targets. The office of KDFS, which is known to have received preferential orders from KT, was also searched.

This search and seizure operation signifies that the investigation has officially begun targeting the group's senior management. It comes six days after the arrest of KDFS CEO Hwang Wook-jung, who is considered a key figure in the preferential order allegations, on the 14th. It is reported that former CEO Koo has already been registered as a suspect.

The prosecution suspects that former CEO Koo and other senior executives of the group formed a kind of 'interest cartel' to systematically funnel orders to KDFS and used the increased profits to create and use slush funds worth tens of billions of won. CEO Hwang held key positions in the group during former CEO Nam's tenure and, after Koo's appointment, was re-employed at KDFS after passing through KT Telecop, the ordering company.

Acting CEO Park was also regarded as the de facto 'second-in-command,' concurrently serving as head of the Management Planning Division and Chief Safety Officer under Koo's leadership.

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

During the investigation, the prosecution reportedly secured recordings in which CEO Hwang mentioned former CEOs Koo Hyun-mo and Nam Joong-soo in connection with the preferential order scheme. They also obtained statements indicating that Acting CEO Park pressured KT Telecop executives, saying, "The preferential order scheme was discussed with former CEO Koo."

After former CEO Koo took office in 2020, KT Group changed the facility management (FM) order issuing company from KT Estate to KT Telecop. As a result, KT Telecop is suspected of concentrating orders, which were previously divided among four subcontractors?KDFS, KSmate, KFnS, and KSNC?onto KDFS and KSmate. Through this, KDFS's sales reportedly nearly doubled in two years.

Earlier, CEO Hwang was arrested on charges including providing financial benefits such as KDFS corporate cards to KT headquarters executives while requesting an increase in facility management service volumes for KDFS in 2021. The prosecution plans to summon former CEO Koo and others for questioning about their involvement once the analysis of seized materials is complete.

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