|The KT Corp. logo is displayed atop one of the company’s branches in Seoul. (Bloomberg)|
KT Corp. has long been cut from the strings of the government apron, but it seems the fate of its chief executives remains in the hands of the administration.
KT chairman Lee Seok-chae has been plagued with rumors of his imminent departure from the moment President Park Geun-hye took office.
The allegations about his mismanagement aside, the biggest strike against Lee is that he started his term under former president Lee Myung-bak.
“We thought the chairman would be able to carry out his term, but it looks like we were mistaken since the plot for ousting Lee seems to be thickening,” said one source close to KT who was unable to mask his disappointment over how Lee had become an apparent political target.
In March, Lee had been voted to a second term. About a year and a half is left until he is officially due to step down.
The main allegations against Lee are that he engaged in gross negligence while operating a number of online and educational business units.
While the charges may be serious, most KT employees are quick to point out that the CEO had few alternatives.
They also argue that in the case of some of them, such as the subway ad business KT was involved in, Lee’s only crime was that he failed to turn around a company that had already been losing money under his predecessor.
But it seems these charges are more than enough for the administration and politicians to build a case against Lee.
It won’t be the first time a CEO at a once state-owned company like KT has been replaced with the incoming government: Lee’s predecessor Nam Joong-soo faced the same fate.
One way these firms can try to shake free of such government influence is by obtaining an owner or a stakeholder with a controlling share.
Right now, the national pension fund and Mirae Asset hold the biggest shares that are still less than 20 percent combined.
But changing the corporate governance structure won’t be easy and it will take time, experts say.
For the time being, Lee will remain as someone who happened be in the wrong place at the wrong time.
By Kim Ji-hyun (email@example.com)