"Where Was the Audit?" KT Shareholders' Meeting Turns into a Rebuke, President Park Jong-wook Apologizes "Sorry"

At the KT Shareholders' Meeting Held on the 31st, Shareholders Shouted Loudly

"Stepping down is normal management." "Do you prefer the court or here?"

At 9 a.m. on the 31st, at the KT Research and Development Center in Seocho-gu, Seoul, during the KT shareholders' meeting, as Park Jong-wook, Acting CEO and Chair of the shareholders' meeting and Head of the Management Planning Division (President), declared the opening, loud voices erupted among the shareholders. The chaotic atmosphere continued while President Park delivered his greeting, and some shareholders shouted at him, "Is it right for a co-conspirator in the Political Funds Act to be acting CEO? What has the auditor been doing all this time?"

On the 31st, shareholders are entering the meeting hall at the KT shareholders' meeting held at the KT Research and Development Center in Seocho-gu, Seoul. Photo by Dongju Yoon doso7@

Although President Park apologized, saying, "Originally, this was supposed to be a communication platform where voting rights are exercised and expectations related to management are expressed, but I am sorry this shareholders' meeting did not become such a place," the atmosphere inside the hall hardly calmed down.

The KT shareholders' group urged President Park, saying, "Shareholders are angry about external pressure occurring every time the regime changes," and requested, "Please amend the articles of incorporation to prevent management disruptions caused by non-experts and politically affiliated directors." They also demanded ▲ implementation of quarterly dividends in a way beneficial to shareholders ▲ expansion of the scale of treasury stock cancellation from this buyback ▲ expansion of dividend payout ratio and regularization of treasury stock cancellation.

President Park said, "I will devote all my efforts to establishing a new governance structure with stakeholders including shareholders and to restoring normal management," adding, "We expect about five months to comply with procedures (until management normalization), but we will make every effort to shorten this period as much as possible."

At this shareholders' meeting, only agenda items such as ▲ approval of financial statements ▲ partial amendment of the articles of incorporation ▲ approval of director remuneration limits ▲ revision of executive retirement pay regulations were resolved and processed. The agenda to reappoint professors Kang Chung-gu of Korea University’s Department of Electrical and Electronic Engineering, Yeo Eun-jung of Chung-Ang University’s Department of Business Administration, and Byeon Myeong, former CEO of Lotte Rental, for one-year terms was scheduled but automatically discarded as these three outside directors resigned just before the shareholders' meeting.

As a result, only one outside director, Kim Yong-heon, remains on the KT board. However, under the Commercial Act’s provisions on director vacancies, the outside directors who resigned that day can serve until a new board is formed, in the capacity of retired directors. According to Article 386, Paragraph 1 of the Commercial Act, "When the number of directors prescribed by law or the articles of incorporation is not met, directors who have retired due to expiration of term or resignation shall have the rights and duties of directors until newly appointed directors take office."

Now, the ball moves to the ‘New Governance Establishment TF’ under the Acting CEO system led by Park Jong-wook, Head of the Management Planning Division (President), which includes external experts. This TF will promote improvements across governance, including CEO and outside director appointment procedures and the role of the board. A reshuffle of the board is expected. In the process of forming a new board, the largest shareholder, the National Pension Service, which has represented the government and ruling party’s stance, inevitably wields significant influence.