By Kim Hyun-bin
SK Telecom and KT have been busy strengthening their respective legal teams by recruiting prominent judicial officials as competition among the telecom companies is expected to become fiercer. Both firms have new project launches scheduled throughout the year that could require more extensive legal review.
Earlier this month, KT, the country's second largest mobile carrier, recruited Ahn Sang-don, former director of the Seoul Northern District Prosecutor's Office, to head up the company's legal office.
The mobile carrier has also strengthened its compliance committee by combining the compliance executive office, and ethical management and compliance risk departments, which will be led by Kim Hee-kwan as chief compliance officer. Kim previously headed the Justice Institute.
"We have recruited outside legal experts to enhance company compliance and any administrative legal issues," a KT official said.
However, many believe the move was made after KT CEO Ku Hyeon-mo was appointed in late March, with the task of preventing issues related to compliance and management risks that could hinder company operations. This came because in the past many key executives were summoned during investigations by the prosecution.
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| KT CEO Ku Hyeon-mo |
Ku himself is among the executives that allegedly violated the Political Fund Law. KT's incumbent top executives, including Ku, created a 1.1 billion-won ($970,000) slush fund between May 2014 and October 2017, and spent about 438 million won of the money to bribe 99 lawmakers.
On April 6, SKT, the country's leading mobile carrier, appointed Jung Jai-hun as the head of its Law Affairs II Group. Jung was the chief prosecutor at the Seoul Central District Court and will oversee legal affairs related to security, commerce, media and artificial intelligence matters, as well as the new projects sector for the firm.
Just before recruiting Chung, SKT divided its legal department into two, which the company says was to increase the efficiency and speed with which the company could address legal issues. The Law Affairs 1 Group is in charge of mobile communications and New ICT sector led by Vice President Park Yong-ju.
"We have established the Law Affairs II Group as we have expanded our ICT businesses, which require more legal assistance," an SKT official said. "Chung graduated from Seoul National University Law School and is a legal expert with 20 years of experience in the field."
SKT says separating the legal department was part of President Park Jung-ho's vision to establish a dual operating system to enhance administrative support. The company went through restructuring and split the mobile communications and the New ICT departments in two aiming to better enhance efficiency.
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| SKT President Park Jung-ho |
However, many industry watchers are skeptical regarding the moves and believe the telecom companies have strengthened their legal circle to better prepare for legal battles ahead from fierce competition and clashes that could occur while expanding their market share in newly launched businesses.
"The competition among the telecom companies has become fierce as they continue to expand their new businesses and this needs more legal attention," an industry official said. "There are possibilities that the new businesses could engage in legal battles so to offset these the telecom companies seem to have strengthened their legal structures."
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