KT shareholders frustrated by political influence over CEO appointment

The Korea Times

The Korea Times

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Sun, September 24, 2023 | 20:19

Companies

KT shareholders frustrated by political influence over CEO appointment

Posted : 2023-03-27 16:57

Updated : 2023-03-28 15:25

Yun Kyung-lim, president of KT / Courtesy of KT

By Baek Byung-yeul

KT's shareholders are frustrated by the future of the telecommunications company being repeatedly swayed by political influence in the process of choosing a new CEO. KT said Monday that Yun Kyung-lim, president of the company, resigned as a CEO candidate 20 days after he was officially nominated.

"KT President Yun Kyung-lim decided to resign from the candidate for the next CEO and conveyed his intention to the board of directors. Yun said that it would be most desirable for a new CEO to be elected by improving the governance structure beyond the expectations of key stakeholders," KT said in a statement. "KT will do its best to stabilize its management."

Yun, who serves as a head of KT's group transformation division, was appointed as a CEO nominee on March 7 after the current CEO Ku Hyeon-mo gave up seeking a second term. As soon as he was nominated, however, Yun has been criticized by the ruling party's lawmakers as an "avatar" of CEO Ku, who was appointed during the previous administration.

KT was supposed to take a vote on Yun's appointment as its new CEO during a shareholders' meeting on March 31, but the agenda will be excluded from the meeting with him expressing his resignation. The board of directors will call a meeting on Tuesday to discuss its response to the leadership vacuum. The incumbent CEO Ku's term will expire on March 31.

Earlier this year, Ku was virtually forced by the government to step down. The company's largest shareholder, the National Pension Service (NPS), also opposed Ku's attempt at a second term.

KT's building in Seoul / Yonhap

After the incumbent CEO gave up his second term, lawmakers of the ruling People's Power Party criticized Yun saying, "there is a rumor that CEO Ku resigned from the candidate and put Yun as his avatar instead." The prosecutors also began to investigate Ku and Yun this month, after a civic group alleged malpractice.

Though it has been over 20 years since KT was privatized in 2002, the state-run company-turned-private mobile carrier has not been free from political influence. Since 2002, the company appointed five chiefs until the current CEO Ku. But only one CEO succeeded in serving a second term.

The industry view is that Yun resigned as a CEO candidate because he was slandered by the political community. "Yun has been criticized because the ruling party failed to appoint a figure that they were pushing for," an official in the telecom industry said on condition of anonymity.

Shareholders are also expressing their dissatisfaction as the new CEO appointment process seems thwarted by political influence.

"Whenever the regime changes, the new administration will mobilize the NPS to attempt to appoint the candidate they want," a user wrote on an online stock discussion board.

Another user wrote "I don't understand how a candidate selected by the board of directors through due process is changed by the influence of the regime" and the other user complained saying "the presidential office should announce who the next CEO will be if this is the case."

baekby@koreatimes.co.kr