Suspicions of Embezzlement
Prosecutors have launched a raid on the headquarters and subsidiary of KT Corp as part of an investigation into suspicions of embezzlement. According to industry sources on Aug. 28, the Fair Trade Investigation Division of the Seoul Central District Prosecutors’ Office, led by Chief Prosecutor Lee Jung-seop, forcibly searched around 7-8 locations including the KT headquarters, kt cloud, the subsidiary OpenCloudLab (formerly known as SPARK & ASSOCIATES), and the residence of former KT President Yoon Kyung-lim at approximately 9:30 a.m.
Prosecutors suspect that during the acquisition of a 100% stake in SPARK & ASSOCIATES by kt cloud in September of the previous year, KT executives committed embezzlement. Allegedly, they purchased the stake for several billion won more than its fair value, causing financial loss. Accordingly, former KT CEO Gu Hyun-mo and former President Yoon Kyung-lim, who were then serving as the CEO and the head of the Group Transformation Division, respectively, have been charged with embezzlement under the Aggravated Punishment of Specific Economic Crimes Act. Based on the evidence secured during the raid, prosecutors plan to summon and interrogate the former executives to further examine the facts.
SPARK & ASSOCIATES is known to be a company established by Chung Eui-sun, chairman of Hyundai Motor Group. Meanwhile, prosecutors are suspicious of “favorable investment” following Hyundai Motor’s acquisition of AirPlug, a company established by former CEO Gu’s brother, during its management crisis in July 2021. Allegedly, KT purchased a company associated with Chairman Chung Eui-sun and Hyundai Motor bought the company linked to the former CEO’s brother using company funds.