Former KT head acquitted of embezzlement charges

By Lee Kyung-min

A district court found Lee Suk-chae, former chairman of KT, the nation’s second-largest telecom company, not guilty of embezzlement and breach of trust, Thursday.

Lee was indicted last year on charges of causing 10.3 billion won ($8.6 million) in losses to the company by purchasing stocks of three venture firms at higher-than-market value from August 2011 to June 2012.

He was also accused of creating a slush fund worth 2.7 billion won from which he pocketed 1.1 billion won between January 2009 and September 2013.

The Seoul Central District Court acquitted Lee of breach of trust, saying he followed due procedure in making the purchases.

“The company decided to purchase the stocks at the prices after discussing the issue with an outside accounting firm, and there was no forcible order from Lee to do so,” the court said.

“Lee followed relevant company policy, and the deals were his strategic move as the head of the company,” it said.

The court acknowledged that he created the slush fund, but cleared Lee of embezzlement charges, saying he spent the money paying his employees on celebrations and for condolences. “The money was spent on the weddings of company employees and deaths of their family members, or for after-work gatherings, not for his personal gain,” the court said.

The prosecution investigated the case in October 2013 by raiding KT headquarters. Lee stepped down in November of that year.