KT board accepts Chairman Lee Suk-chae’s resignation

KT Chairman Lee Suk-chae, who spearheaded the merger of Korea Telecom and mobile carrier KTF after his inauguration in January 2009, prematurely stepped down as chairman and CEO on Tuesday. Lee won re-election in March last year, but ended up quitting the post 16 months before the end of his term set for March 2015.

At an emergency board of directors meeting held at its Seocho office in Seoul Tuesday afternoon, KT announced that the board accepted Lee’s resignation. Until the next CEO is named at a general shareholders’ meeting, President Pyo Hyun-myung, head of the T&C division, will serve as acting chairman and CEO to lead the company’s emergency management system.

“I would like to convey my appreciation to executives and staff who did their best despite tough environment, and customers and shareholders who have shown strong affection for and love of KT,” Lee said at the board meeting on Tuesday. “I will never forget throughout my life the blessing of having the opportunity to work with KT executives and staff.”

The KT board said it agreed to accept Chairman Lee’s resignation in consideration of the need to address a flurry of pending managerial issues while prosecutorial probe into the company is underway. Lee offered to resign to the board last Sunday, after returning from a business trip to Rwanda in Africa.

The board will hold a meeting again early next week, and set up a CEO nomination committee comprised of the entire members of one internal director and seven outside directors in compliance with its constitution, and take steps to select a next CEO candidate. The committee will confirm the candidate through its own verification process, before setting schedule for a general shareholders’ meeting.

Though KT says it will select the next CEO in a prompt fashion, watchers predict that it will take a considerable period of time before finalizing the candidate nomination for the KT chairman, a post that is politically sensitive. The emergency management system could remain in effect until the regular general shareholders’ meeting set for March next year.

“We urge authorities to conclude investigation into the company at the earliest date possible so that KT, whose majority stake is owned by the public, can resume normal operation, provide stable service, and advance into foreign markets as soon as possible,” the KT board said in a press release, in expressing sense of burden from three rounds of raid and search into the firm over the past three weeks.

With Chairman Lee’s resignation accepted by the KT board, prosecutors will start summoning and questioning in earnest KT’s management, including former Chairman Lee, Kim Il-young, chief of the Corporate Center, and Kim Hong-jin, president of G&E.