KT Corp. CEO Offers to Quit After Prosecutors Raid Headquarters

November 4, 2013 Leave a comment

KT Corp. CEO Offers to Quit After Prosecutors Raid Headquarters

KT Corp. (030200), South Korea’s second-largest mobile operator, said Chief Executive Officer Lee Suk Chae offered to resign after prosecutors raided the company’s headquarters and his home. The board will soon decide the resignation date and discuss a successor to Lee, who also held the role of chairman, the Seongnam, South Korea-based carrier said in an e-mailed statement yesterday.Prosecutors raided KT’s headquarters and Lee’s home last month as they investigate allegations the company incurred losses on asset selloffs and bad investments. People’s Solidarity for Participatory Democracy, a South Korean civic group, filed a lawsuit against the chairman in February, alleging Lee caused about 80 billion won ($75 million) of losses to the company by selling property too cheaply.

“Seeing executives and staff members suffering, I could no longer delay the resignation,” Lee said in an e-mail to employees yesterday. “I am also open to disclose all my salary and stock bonuses, if the company can be freed from the recent allegations and speculations.”

KT didn’t sell assets at low prices, Kim Dong Woo, a spokesman for the company, said by phone today.

Shares of KT fell 1.6 percent to 34,650 won as of 11:52 a.m. in Seoul. The stock has fallen 2.5 percent this year compared with a 1.6 percent advance for the benchmark Kospi index.

To contact the reporter on this story: Jungah Lee in Seoul at jlee1361@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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