An appeals court on Friday convicted the former head of local telecoms giant KT Corp. of creating slush funds and embezzling the money.

Overturning a lower court's decision, the Seoul High Court sentenced Lee Suk-chae to 18 months in prison, suspended for two years.

Lee was indicted in 2014 on charges of causing financial losses worth some 10 billion won ($8.5 million) to KT, the country's top fixed-line operator and No. 2 mobile carrier, by making poor business decisions before stepping down in November 2013.

Convicting Lee of creating a slush fund of some 1.1 billion won, the court said he spent the money on himself, despite his claim that it was used for the company.

Still, he was acquitted of malpractice in the management of the company.

The district court had acquitted Lee of all charges in September.

A former executive of the company, Seo Yu-yeol, received the same ruling for his involvement in the irregularities.

Lee, a close aide to former President Lee Myung-bak, took the helm of the mobile carrier in 2009. He also served as a telecommunications minister in 1995 under the Kim Young-sam administration. (Yonhap)