“A number of changed conditions (in the market and prosecutors‘ investigation) have led us to come to a conclusion that we must step up our reform efforts. We will do our best to tide over the crisis,” Kwon explained.

He also said POSCO decided to temporarily suspend its $12 billion steel plant construction project in India, which has spent 10 years in delays.

”We decided to tentatively stop the project as we have not seen visible progress,” he told The Korea Herald.

POSCO’s Indian project to build a factory with a yearly production capacity of 12 million tons in Odisha’s Jagatsinghpur district has gone through 10 years of delays due to a backlash from residents, environmental concerns and other reasons.

Kwon’s appearance at the IR session was unusual, as the company has traditionally disclosed its earnings via conference call, suggesting a move of desperation to overcome what they call a crisis.

The event comes two months after the company launched an emergency committee established to overhaul the steelmaker and its subsidiaries on the heels of the slush fund allegations. CEOs and executives of POSCO affiliates submitted their resignations en masse upon the organization’s launch in a symbolic gesture.

The alleged creation of slush funds and improper M&A deals involve former and incumbent key officials of the firm, including ex-chairman Chung Joon-yang.

The prolonged investigation, which began in March, and sluggish demand in the steel industry have led the group’s shares to see a 25 percent fall this year, falling to the lowest point in nine years. The price of POSCO shares closed at 209,000 won ($183), down 3.91 percent Wednesday.

As for its restructuring effort, the chairman said it aims to focus on steel products and streamline its business into four domains -- materials, energy, infrastructure and trading.

The group will cut troubled domestic affiliates in half gradually, and slash noncore overseas businesses into 30 percent by 2017, the firm said.

“POSCO alone posted 140 billion won more in its operating profit in the first half of the year, but the consolidated figure dropped 150 billion won. We are afraid that the poor financial status of other affiliates could expand group-wide to hurt other units,” the group said in a statement.

Transparent management was another core issue of Wednesday‘s announcement.

All project deals, including those with another POSCO affiliate, will be made through a transparent bidding process, preventing any misunderstanding about suspected corruption and graft.

When a favor is asked of employees, they will be required to provide details including the nature of the favor, the time and place the request was made, and the identity of those involved.

The group will also get rid of its culture of preferring personnel within the group and hire more outsiders for a change.

Meanwhile, POSCO’s second-quarter operating profit fell 18.2 percent on-year to 686 billion won, though it surpassed market expectations. The average operating profit forecasted by seven major brokerages, including Kyobo Securities and Yuanta Securities, was 568 billion won. Sales also dropped 9.1 percent to 15.18 trillion won.

By Suk Gee-hyun (monicasuk@heraldcorp.com)