Court Dismisses Injunction to Nullify KT CEO Appointment Process... Management Transition Gains Momentum

The court has ruled that the selection process for KT’s next CEO, which had been mired in controversy over disqualification issues for board members, was legitimate. This decision is expected to accelerate the transfer of management control to the new CEO, Park Yunyoung.

Suwon District Court building. Photo by Yonhap News

According to legal sources on February 28, the Civil Division 5 of the Seongnam Branch of the Suwon District Court dismissed the injunction filed by Cho Taewook, Executive Director of the KT Human Rights Center, in December last year to suspend the effect of the KT board of directors’ resolution.

Previously, Director Cho filed for an injunction to suspend the validity of the board’s CEO appointment resolution, arguing that the former outside director, Cho Seungah, who was disqualified, was involved in the decision-making process. After being appointed as an outside director of KT in June 2023, former director Cho concurrently served as an outside director at Hyundai Steel, an affiliate of Hyundai Motor Group, from March the following year. However, when the National Pension Service sold part of its KT shares, Hyundai Motor became the largest shareholder of KT. According to the Commercial Act, if the largest shareholder is a corporation, any director, auditor, executive officer, or employee of that corporation loses eligibility to serve as an outside director of KT. As a result, Cho was no longer qualified to serve as an outside director in both companies simultaneously.

Although Cho’s disqualification arose in March 2024, the matter was only revealed later, leading to her delayed resignation in December of last year. This gave rise to controversy over the validity of board decisions made during her ineligible period.

KT argued that former director Cho did not participate in the interview process for the final three CEO candidates, including Park, and therefore had no influence on this core procedure.

On the other hand, Director Cho’s side insisted that since former director Cho was involved in the overall screening process, the legitimacy of the decision-making was compromised. However, the court dismissed Director Cho’s injunction request, siding with KT.

As a result, legal risks surrounding the appointment of the new CEO, Park, are considered to have been resolved. The transfer of management control, including personnel and organizational restructuring, is now expected to proceed more rapidly.

This content was produced with the assistance of AI translation services.