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Former KT chief faces summons over alleged graft

Former KT chief faces summons over alleged graft

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Published : 2013-12-18 13:54
Updated : 2013-12-18 13:54

The former head of telecom giant KT Corp. will be summoned this week over alleged managerial wrongdoings and creating slush funds, prosecutors said Wednesday.

Lee Suk-chae, who tendered his resignation last month, has been notified to show up for questioning at the Seoul Central District Prosecutors' Office in southern Seoul Thursday, they said.

Prosecutors suspect Lee inflicted huge losses on KT, the country's top fixed-line operator and No. 2 mobile carrier, by intentionally making poor investments and inking dubious business deals.

The 68-year-old former chief allegedly ordered KT employees to invest in online education and subway network systems, causing the company hundreds of billions of won in losses, prosecutors said,

Lee is also under suspicion of selling 39 office buildings of the company at below market price, causing 86.9 billion won ($81.8 million) in losses to KT and its investors, they added.

Suspicions have arisen that Lee stashed secret funds by inflating the costs of salaries paid to the firm's executives, prosecutors said.

The probe was launched after local civic groups filed charges of dereliction of duty against Lee with the Seoul Central District Prosecutors' Office in February and again in October.

State prosecutors have since raided the head office and affiliates of KT as well as residences of several executives and Lee as part of the investigation.

Lee, a close aide to former President Lee Myung-bak, took the helm of the mobile carrier in 2009. He also served as a telecommunication minister in 1995. (Yonhap News)

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