Telecom Bribery Scandal Moves to KT Chief
By Kim Tong-hyung
Staff Reporter
The bribery scandal engulfing telecom companies has consumed KTF CEO Cho Young-joo and is now moving to take on KT President Nam Joong-soo.
Prosecutors are taking a harder look at suspicions that Nam took bribes from equipment makers providing their products to the telecommunications giant, officials said Tuesday.
An investigation into Nam would ensure the recent controversy over alleged business irregularities at KT and its wireless unit, KTF, explodes into a national scandal.
The timing couldn't be worse for KT, which had planned to complete its merger with KTF by the end of the year, a move considered the biggest piece in the puzzle for the company to find new growth outside of the saturated fixed-line telephony market.
However, with Nam now under the microscope, disruption to business plans seems inevitable.
KT officials declined to confirm whether the company was being criminally investigated.
``We do not know if the prosecutors are investigating all of KT, but they have yet to declare an official investigation,'' said a KT spokesman.
Cho, the former boss of KTF, has already been arrested on charges of taking 2.4 billion (about $2 million) in bribes from a subcontractor between 2006 and 2007.
Just hours after his arrest, Cho resigned from the chief executive post at KTF and the company plans to summon an executive board meeting soon to elect a new CEO who will be asked to finish the job on the KT-KTF merger.
However, should prosecutors confirm his involvement in business irregularities, Nam's job status could also be in jeopardy, casting further confusion into business plans.
Prosecutors have recently questioned Cho's wife, who is known to have managed the bribes collected from the equipment makers, and are looking into suspicions that part of the money was used to lobby politicians.
It was widely expected that the investigation would spread to KT, as Nam had been chief executive of KTF from the start of 2003 to August, 2005.
The Seoul Central District Prosecutors' Office said it is looking into suspicions that Nam received bribes in the range of a few hundred million won from equipment makers like BCNe Global through bank accounts set up under another person's name.
However, prosecutors declined to confirm whether they plan to summon Nam and denied reports by some media outlets that he is currently banned from overseas travel.