[Exclusive] KT to Close Signage of Russian IDC Subsidiary in 11th Month Since Establishment

April 12 Commencement of Liquidation Process
Former CEO's Key Projects and Ukraine Invasion Cause Drift

KT is closing its internet data center (IDC) business corporation in Russia's Primorye region less than a year after establishing it last year. The project lost momentum as former CEO Koo Hyun-mo, who was driving the business amid the prolonged Ukraine invasion and the resulting instability in Russia, stepped down.

On the 12th, KT reported the liquidation of KT Primorye IDC to the unified state register of Russian corporations. The liquidation period is until April 3, 2024, and Degа Aleksey Olegovich was appointed as the liquidator.

[Photo by KT Homepage]

KT established KT Primorye IDC in Primorye, Russia, on May 12 last year to pursue the IDC business. It is giving up the business just 11 months after founding the corporation. On KT’s website under the global business section, only KT RUS is introduced as its Russian entity.

Entering Russia and establishing the IDC was one of former KT CEO Koo Hyun-mo’s key initiatives. KT targeted Russia to establish a foothold for expanding into the European market. When Koo was head of the management planning division in 2018, he partnered with the Primorye regional government to cooperate on building a smart city. After becoming CEO, in September 2021, he signed a memorandum of understanding with the Russian Far East Development Corporation to jointly build an IDC in Vladivostok, the administrative center of Primorye. They also agreed to provide support such as permits, tax benefits, and regulatory easing. Koo was even on a business trip to Russia during the KT network outage in October 2021, showing his commitment to the region. Despite the severe spread of COVID-19, KT’s top executives visited Russia.

Although KT secured a strong local partner, the establishment of the Primorye IDC did not go smoothly from the start. Despite backing from the Primorye regional government and the Far East Development Corporation, Russia invaded Ukraine on February 24 last year. As international condemnation of Russia grew, it became difficult to start new businesses easily. The project failed to progress quickly, and KT only established the KT Primorye IDC corporation and began the IDC business on May 12.

However, as the war prolonged, global sanctions against Russia intensified. With global companies withdrawing from Russia one after another, it became impossible to expand the business while ignoring international public opinion. Moreover, the project lost its driving force. From the second half of last year, doubts about Koo’s reappointment arose, and he eventually stepped down. Without a new CEO appointed, it is difficult to push forward the former CEO’s key projects aggressively. Ultimately, KT decided to liquidate the corporation and abandon the business after 11 months.