Prosecutors Raid KT Headquarters and Subsidiaries... Evidence of Embezzlement Involving Koo Hyun-mo and Others

Prosecutors investigating KT Group's 'suspicion of preferential treatment in business allocation' have detected signs of breach of trust by former CEO Koo Hyun-mo and other executives, and have launched a forced investigation.

kt Gwanghwamun Building [Image source=Yonhap News]

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jung-seop) dispatched prosecutors and investigators to seven to eight locations on the morning of the 28th, including KT headquarters, KT Cloud, the office of its subsidiary Open Cloud Lab (formerly Spark & Associates·Spark), and the residence of former KT President Yoon Kyung-rim, to secure related materials.

Prosecutors suspect that KT Cloud paid several billion won more than the normal corporate value when purchasing 100% of Spark's shares for 20.68 billion won in September last year. It is reported that former CEO Koo and former President Yoon, who were involved in the decision-making process as KT CEO and Group Transformation Division head respectively at the time, have been booked as suspects on charges of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.

Spark is a company established by the brother-in-law of Hyundai Motor Group Chairman Chung Eui-sun. Prosecutors suspect that KT made this investment as a form of repayment for Hyundai Motor's purchase in July 2021 of a company owned by former CEO Koo's brother, who was facing management difficulties.