Published : 2013-10-22 20:37
Updated : 2013-10-22 20:37
The prosecution raided the offices and residences of telecom giant KT’s top executives, including chairman and CEO Lee Suk-chae, who are accused of a breach of trust that allegedly caused huge losses to investors.
Investigators from the Seoul Central District Prosecution’s Office seized computer hard drives, accounting records and internal reports from the head office in Bundang, Gyeonggi Province, its Seoul office in Seocho and other affiliates.
The residences of Lee and other senior executives were also raided at the same time. The prosecution has reportedly imposed an overseas travel ban on Lee.
The searches were made after the company had been uncooperative to the request to submit relevant documents, investigators said.
In February the People’s Solidarity for Participatory Democracy lodged a complaint against Lee that he caused the company huge losses after making bad business decisions.
The chairman ordered the company to invest in online education, content business and a subway network system that ended in failure, the PSPD claimed. Particularly, he has caused 6 billion won in losses by ordering KT to incorporate OIC Language Visual, a content firm, it added.
Lee also allegedly received kickbacks from unauthorized subcontractors in exchange for business favors. Those companies won a list of contracts although they were not included in the usual pool of subcontractors working for KT.
Earlier in the month, the civic group filed additional complaints claiming that he sold some 39 KT offices for substantially lower than the market price between 2010 and 2012. Lee’s decision has caused nearly 90 billion won in losses, according to the group.
KT countered that the company sold their property assets at prices close to appraised prices.
“The ratio of sales prices to estimated prices reached 95.2 percent,” a KT official said.
“(The company) had to sell its property assets at a time when it suffered due to a sluggish market and a drop in sales. The sale of property assets came as part of sound asset management,” the official said.
The company has been denying other allegations as well.
Sources say, however, KT didn’t respond properly to the prosecution’s request and has submitted documents that are only favorable to the company. The prosecution said that it will closely analyze documents seized during the raid and soon question KT officials involved in cases.
Investigators will look into allegations that Lee ordered the company to make investments in new businesses, knowing that the company was already in red, officials said.