Former KT CEO Koo Hyun-mo Acquitted in First Trial of Subcontracting Law Violation; "Insufficient Evidence of Management Interference"

[Financial News] Former KT CEO Koo Hyun-mo, who was brought to trial on charges of intervening in the appointment of the CEO of a subcontractor, was acquitted in the first trial. Former executives and employees who were tried alongside him were also found not guilty on the related charges.
The Criminal Division 23 of the Seoul Central District Court, presided over by Judge O Se-yong, acquitted Koo on the 25th of charges of violating the Monopoly Regulation and Fair Trade Act (MRFTA). KT Telecop Co., Ltd., which was also tried under the joint liability provision, was likewise acquitted.
The court said it was difficult to conclude that Koo used his position as KT CEO to instruct KT Telecop's subcontractor, KS Mate, to appoint a former KT executive as its CEO. In other words, the evidence submitted by prosecutors was not enough to prove that he interfered in management.
The court explained, "Based on the evidence submitted by the prosecutor alone, it is difficult to conclude that Koo conspired with executives and employees to use his influence and interfere in management so that the former executive could take office as a director."
Shin Hyeon-ok, former head of KT's management support division, who had faced the same charges as Koo, was also found not guilty.
The court also found former executives and employees, including Shin, not guilty of MRFTA violations. It said there was insufficient proof that they used their superior bargaining position to harm counterparties during KT Telecop's request to adjust work volumes. The court also noted that the conduct was tied to the growth strategies of KT and KT Telecop, and therefore could not be deemed a violation of the MRFTA.
Shin faced multiple charges, but was ultimately convicted only of coercion. As the person responsible for personnel matters across KT, she was found to have forced former employees assigned to KT Telecop to allocate work volumes, which amounted to compelling them to do something they were not obligated to do. Shin was fined 5 million won.
In addition, three executives and employees who received corporate credit cards from a subcontractor and used them for personal purposes were found guilty of breach of trust, as was a director of the subcontractor who handed over the cards, on charges of aiding and abetting breach of trust. The court said it took into account the fact that all of the money they obtained was returned to the company. All of them received suspended prison terms and were ordered to pay forfeiture amounts.
Koo was accused of interfering in management in 2020 by instructing KS Mate, a subcontractor of KT's subsidiary KT Telecop, to appoint a former executive of a KT affiliate as its CEO. Shin and others who were tried with him were charged with causing disadvantages to existing partner companies in the process of reallocating facility management service work volumes for KT and KT Telecop to specific vendors.
[email protected] Jung Kyung-soo Reporter