Former KT CEO Ku Hyun-mo Acquitted in First Trial Over Alleged Interference in Subcontractor Management

Former KT CEO Ku Hyun-mo, who was indicted on charges of wrongfully ordering a subcontractor to appoint a former affiliate executive, has been acquitted in the first trial.

The 23rd Criminal Settlement Division of the Seoul Central District Court (Presiding Judge Oh Se-yong) acquitted former CEO Ku, who was tried on charges of violating the Fair Subcontract Transactions Act, on the 25th.

Shin Hyun-ok, the former head of KT's management support division who was indicted along with him, was also acquitted of charges under the Fair Subcontract Transactions Act.

The court ruled that the evidence submitted by prosecutors was insufficient to prove that former CEO Ku and former Vice President Shin interfered in management by instructing subcontractor KSmate in 2020 to appoint Person A, a former affiliate executive.

The court pointed out that "it is insufficient to recognize that the defendants interfered in management by using their influence to have Person A appointed as a director of KSmate."

Former Vice President Shin was also accused of significantly reducing the transaction volume allocated by KT Telecop to other subcontractors in March 2021 to funnel transaction volume to subcontractor KDFS, but was found not guilty.

The KT Telecop corporate entity, indicted together under the same charges, was also acquitted.

The court noted that "KT Telecop's adjustment of transaction volumes can be viewed as part of its own growth strategy," adding that "it is difficult to conclude that this was an act intended to inflict disadvantages on other subcontractors by exploiting a dominant bargaining position."

However, the court found former Vice President Shin guilty of coercion for forcing transaction volume adjustments by threatening KT Telecop employees with personnel disadvantages, sentencing him to a fine of 5 million won.

The court stated that "from the perspective of the victimized employees, the defendant (former Vice President Shin), who was in charge of KT affiliate personnel affairs, likely perceived it as a notification of harm," and that "it must be regarded as having forced them to do something they were not obligated to do through the threat of harm."

Three former KT executives, who were jointly indicted on bribery breach of trust charges related to the subcontractor KDFS, were sentenced to prison terms ranging from one year with two years of probation to two years with three years of probation.

The court found most of the charges against them guilty, ruling that they received tens of millions of won worth of valuables from KDFS CEO Person A in exchange for lobbying related to increasing facility management (FM) order volumes.

Person A, who was sent to trial alongside them on charges of offering bribes for breach of trust, was sentenced to 10 months in prison with two years of probation.

Previously, prosecutors had also investigated the possibility that former CEO Ku was involved in the KT Group's process of changing its FM order placement company to KT Telecop in 2020 and funneling work previously shared by four existing companies to KDFS and others to create slush funds, but concluded the case without charges in May 2024.
 
(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.