Ruling camp should stop bid to take KT CEO
President Yoon Suk Yeol and his ruling People Power Party (PPP) have taken flak for having interfered with the naming of a new CEO for telecommunications giant KT. A group of PPP lawmakers convened a press conference Thursday and slammed KT's selection of four candidates from among its former and current executives to replace outgoing CEO Ku Hyeon-mo.
The PPP members described the KT board of directors' decision as equivalent to an "interest cartel" and a "league of their own." The presidential office also backed the move. "The governance (of the KT) should be formed in accordance with fair and transparent procedures," the office said in a press release.
This means they are interfering directly with the process of naming the next CEO of the company. Yet it is entirely inappropriate for the ruling camp figures to press for their demands in selecting the CEO of a private firm.
Previously, KT floated Ku as the next CEO candidate for his second term, but to no avail due to alleged pressure from the presidential office, nudging him to drop out of the competition. It appears the presidential office has a certain figure in mind for the post beyond preventing Ku from challenging again. As the preferred person was not included in the four-member shortlist, the office and the PPP seem to have turned offensive, applying the brakes on the nomination process.
The seven PPP lawmakers belonging to the National Assembly's science and communications committee slammed KT for having vetted only four KT members out of the total 33 applicants. They underlined the need to overhaul governance to improve its managerial transparency. Yet their assertion has failed to win support as the candidates were judged to be largely qualified in terms of caliber and experience.
On the contrary, the external candidates allegedly favored by the ruling camp are former political stalwarts and officials who have no experience in the communications industry. The selection of one of them will certainly trigger controversy over the appointment of a CEO following pressure from above.
More than 20 years have passed since KT was privatized. However, the telecom giant has suffered a "cruel history" surrounding its CEOs in times of power shifts, as new administrations wanted their allies to take the post. Now the world is changing fast with the advent of the era of artificial intelligence (AI) represented by ChatGPT. Against this backdrop, it is not totally desirable that KT, now one of the nation's biggest telecom firms and 12th-largest business, is still affected by the government's attempts to intervene in the process of selecting its CEO.
The PPP is poised to push for its demands by calling for investigations into alleged irregularities involving Ku and the KT executives tapped as candidates. It reminds us of the behaviors of the close confidants of the president who coerced former lawmaker Na Kyung-won to give up the race for the PPP chairperson. This can be regarded as the misuse of power beyond mere intervention.
Given the seemingly improper intervention in the CEO selection, the share price of KT recently nosedived to the lowest point in 52 weeks. Yoon and the PPP should listen attentively to the complaints from individual shareholders vulnerable to losses resulting from the inappropriate interference.
Yoon has accented the values of "freedom" and the liberal market system since he took office. He and the PPP should pay heed to the possible reactions of foreign investors regarding the potential impact their action will have on share prices. Should there be any problematic points concerning the governance and transparency of the firm as they put it, they should focus on ameliorating them. They should refrain from seeking to tap their person for the post. Or they should no longer talk about the "liberal market economy."
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