Prosecutors Question Former Hyundai AutoEver CEO for Two Consecutive Days Over 'KT Favoritism Investment Suspicion' (Comprehensive)

The prosecution investigating KT's alleged 'favor investment' summoned former Hyundai AutoEver CEO Seo Jeong-sik for two consecutive days.

Seoul Central District Prosecutors' Office. Photo by Yonhap News

According to the legal community on the 20th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Yong Seong-jin) is investigating former CEO Seo again on this day following his summons the previous day.

The prosecution is reportedly questioning former CEO Seo about the process by which KT Cloud acquired the vehicle cloud company Spark & Associates (Spark, now Open Cloud Lab) at a high price, and whether any kickbacks were received from Spark.

The prosecution believes that KT Cloud purchased Spark, established by former CEO Park Seong-bin, the brother-in-law of Hyundai Motor Group Chairman Chung Eui-sun, at a price higher than the normal market value. KT Cloud acquired 100% of Spark's shares in September last year for 20.68 billion KRW.

The prosecution suspects that this was a favor in return for Hyundai Motor's acquisition of Airplug, a company owned by former KT CEO Koo Hyun-mo's brother, which faced financial difficulties in 2021, by adding a premium of several billion KRW. Additionally, the prosecution believes that Hyundai AutoEver, on which Spark relies for most of its transaction volume, was involved in the process of KT Cloud purchasing Spark. During this process, former CEO Park is believed to have given former CEO Seo a request to "maintain the supply contract well even after the acquisition," along with a kickback of around 80 million KRW.

In relation to this, the prosecution conducted a search and seizure of former CEO Seo's residence on the 20th of last month and Hyundai AutoEver's headquarters on the 11th of this month. Following the investigation, former CEO Seo resigned from his position on the 27th of last month.