Prosecutors Conduct Search and Seizure at Hyundai AutoEver CEO over 'KT Boeun Investment Suspicion' (Comprehensive)

The prosecution investigating KT's alleged 'favoritism investment' has conducted a search and seizure at the residence of Seo Jeong-sik, CEO of Hyundai AutoEver, among other locations.

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Yong Seong-jin) secured materials related to the allegations on the 20th from the residences of Seo and four others, including officials from Spark & Associates (Spark, now Open Cloud Lab).

The prosecution flag is fluttering in the wind at the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul.
[Image source=Yonhap News]

The prosecution is investigating allegations that KT Cloud purchased Spark, a vehicle cloud company established by Park Seong-bin, the brother-in-law of Hyundai Motor Group Chairman Chung Eui-sun, at an inflated price. It is reported that they have detected circumstances suggesting Hyundai AutoEver was involved in the acquisition process.

Spark relies 100% on Hyundai AutoEver for its transaction volume, leading the prosecution to believe that KT Cloud would have found it difficult to acquire Spark without Hyundai AutoEver's assistance.

KT Cloud purchased 100% of Spark's shares in September last year for 20.68 billion KRW. There are suspicions that this included a premium of several billion won as a favor in return for Hyundai Motor's acquisition of Airplug, a company owned by former KT CEO Koo Hyun-mo's brother, who faced management difficulties in 2021.

In connection with this, the prosecution has registered former CEO Koo and former KT President Yoon Kyung-rim as suspects for breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, and conducted search and seizure at KT headquarters, KT Cloud, and Spark. On the 17th, they additionally searched the residences of two KT and KT Cloud employees involved in the Spark acquisition.

Some speculate that the prosecution's investigation, which had been centered on the KT Group, may now be expanding significantly to include Hyundai Motor Group. The prosecution is also investigating allegations of 'preferential treatment in work allocation,' where KT allegedly funneled facility management work to certain subcontractors like KDFS while disadvantaging other companies. In August, KDFS CEO Hwang Wook-jung was arrested and indicted.