As an early presidential election is inevitable in South Korea, rumors over KT Corp.’s constant change of its CEO are spreading among the communication market and securities market as well as politicians.
According to industry sources on December 28, KT Chairman Hwang Chang-kyu will be termed out of office at the end of March next year. Accordingly, the uncertainty of CEO’s position is reaching its peak. Hwang hasn’t declared publicly whether or not he will serve consecutive terms and KT cannot accelerate establishing its business plans for next year.
Its competitors, such as SK Telecom and LG U+, completed their year-end management reshuffle and started making efforts to seek out their new growth engines, including artificial intelligence (AI) and autonomous vehicle. However, KT hasn’t decided on its year-end management reshuffle yet.
KT turned from a public company into a private one by selling 100 percent of the government’s shares in 2002, but its management rights is still determined by the government.
KT, the nation's second largest mobile carrier providing wire telephone networks and ultra-high speed Internet services, is a private firm consisting of 49 percent of foreign shareholders, government-issued stocks and domestic shareholders. However, the control of the company has been determined by the administration every time a president changes. It is the current status of KT.
In this regard, an official from a foreign company, which is a shareholder of KT, pointed out the problem, saying, “From the standpoint of foreign shareholders, KT forcibly changes its president along with each new administration so it is being typecast as a company that is hard to predict due to its inconstant stakeholder policies and business strategies.”
KT has come under private management over the last 15 years but the company still hasn’t established the professional management system. KT was forced to replace two CEOs in succession after 2008 since they failed to follow the intention of the administration at that time.
The current controversy over uncertainties due to Chairman Hwang’s term is also related to the early presidential election.