'Subcontracting Law Violation' Former KT CEO Ku Hyeon-mo Acquitted in First Trial; Court Cites Insufficient Evidence

Former KT CEO Ku Hyeon-mo has been acquitted in the first trial on charges of violating subcontracting laws. He was accused of improperly intervening in the selection process for the CEO of a subsidiary company. Additionally, former executives and employees of KT were also acquitted of charges related to unfair treatment of subcontractors and bid-rigging.

The Seoul Central District Court ruled that while there were suspicions that Ku and another former executive, Shin, used their positions at KT to influence subcontractor personnel decisions, the evidence presented by the prosecution was insufficient to establish these facts. The court also found it difficult to prove allegations of "cronyism" in awarding contracts to subcontractors. It stated that KT's adjustments to facility management service volumes were part of the company's growth strategy and consolidation of partners, with selections based on quality assessments, not intentional disadvantage to other firms.

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Although there are suspicions that former CEO Ku Hyeon-mo and former executive director Shin used their positions at KT to interfere in the personnel of subcontractors, the evidence submitted by the prosecution is insufficient to acknowledge this when considering the facts comprehensively.

However, the court did find Shin, the former executive, guilty of coercion, imposing a fine of 5 million won. The court determined that Shin's remarks to KT Telecop employees, implying dismissal if they did not comply, were sufficient to interfere with their decision-making. The final volume allocation plan by KT Telecop employees was influenced by Shin's pressure.

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The adjustment of volumes for KT Telecop was a follow-up measure according to the company's growth strategy and facility management partner consolidation policy.

Separately, three former KT Telecop employees received suspended prison sentences for accepting bribes. They were accused of receiving corporate cards and having their card payments covered by a subcontractor's CEO in exchange for favorable treatment, amounting to tens of millions of won in illicit gains.

Ku was indicted in 2024 for allegedly directing the appointment of a former KT group executive as CEO of KT Telecop, a subsidiary, thereby unduly interfering with the subcontractor's management. The investigation expanded from a probe into alleged favoritism in awarding contracts within the KT group. Prosecutors had also investigated the possibility of Ku's involvement in creating slush funds but concluded there was insufficient evidence, proceeding only with the subcontracting law violation charges.

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If you don't listen, you will be dismissed.