Will new gov't meddle with KT management?

KT headquarters in Seoul / Yonhap

Questions are mounting about the future of KT CEO Kim Young-shub following the election of President Lee Jae-myung, amid a widespread perception that Kim was the choice of impeached former President Yoon Suk Yeol to lead the telecom giant.

Industry officials are closely watching whether KT will reappoint its current chief in March next year, a move seen as a litmus test of whether the new administration will end the government's longstanding interference in the management of the company, which was privatized in 2002.

Kim, who had worked for LG for nearly four decades, was appointed KT CEO in 2023, with his term set to end in 2026.

Before his appointment, the government blocked KT's efforts to reappoint then-incumbent CEO Ku Hyeon-mo and later obstructed the company's move to install Yun Kyung-lim, head of the group transformation division, who was considered a close aide to Ku.

At the time, the National Pension Service (NPS), then KT's largest shareholder, cited unfair nomination procedures. Prosecutors also began investigating alleged misconduct and questionable transactions involving a specific partner company.

In response, Rep. Jo Seoung-lae of the then-opposition Democratic Party of Korea condemned the withdrawals of Ku and Yun, denouncing them as the result of government interference in a privatized firm.

"Both Ku and Yun resigned because the government and the ruling party kept attacking them," the lawmaker said.

Kim has denied ties with the Yoon administration, but KT's unionized workers have criticized him for allegedly trying to curry favor with Yoon, a former prosecutor general, by appointing former prosecutors to executive roles.

KT Skylife, the group's satellite broadcasting affiliate, also offered its top post last year to Choi Young-bum, former senior public relations secretary at Yoon's office.

In a press conference held in March, the leader of one of KT's multiple labor unions said that KT should consider replacing executives appointed during Yoon's presidency.

Given Ku's advisory role in Lee's think tank during the presidential campaign, Kim could face pressure to step down under the new administration. CEO Kang Goo-young of Korea Aerospace Industries, whose largest shareholder is the state-run Export-Import Bank of Korea, offered to resign on the first day of the Lee administration, Wednesday.

There is also possibility of the labor-friendly new government targeting KT over a string of employee suicides following a controversial restructuring that forced staff into sales roles after downsizing.

However, the new government may face criticism for interfering in KT's management, given the reduced NPS stake in the company. Hyundai Motor Group is now KT's largest shareholder and the NPS dropped to second-largest last year by selling part of its stake.

KT's solid financial performance under Kim's leadership also supports his potential reappointment.

During the first quarter of this year, KT's operating profit rose 36 percent year-on-year to 688.8 billion won ($508 million), while its revenue grew 2.9 percent to 6.8 trillion won. Since Kim took office, KT's stock price has surged from the 30,000 won level to over 50,000 won, marking the fastest growth among the country's three major mobile carriers.