KT Corp. said that Yun Kyoung-lim expressed his intention to step down as the company’s chief executive officer candidate ahead of the annual shareholder meeting on March 31, raising concerns about a leadership vacuum.

Yun’s resignation is believed to be due to continued pressure on the country’s telecommunications company from the political circle. KT had attempted to push through its candidate nomination despite opposition from the majority shareholder, the National Pension Fund and the ruling party. The current CEO Ku Hyeon-mo will step down at the end of this month.

Before Yun’s resignation, KT’s two biggest shareholders, the pension fund and Hyundai Motor Group, were widely expected to vote against his designation. No matter how much KT gains votes from foreign and minority shareholders, it is unlikely to win a majority at the shareholder meeting.

Even if KT wins the proxy fight and seats Yun as CEO, his transition may not be smooth because the telco industry is heavily regulated by the government. There were also concerns that having Yun, who has been criticized by the ruling party, at the helm of KT could increase management risks.

Previously, ruling People Power Party politicians opposed the nomination of KT’s internal and external board members, including Ku and Yun, as a profit cartel, claiming that Yun is an avatar of Ku, who has been accused of breach of trust.

On March 7, a conservative civic organization filed a complaint against Ku and Yun with the Seoul Central District Prosecutors’ Office on charges of professional misconduct. The prosecutors have launched an investigation into the case.

KT will hold the shareholder meeting as scheduled on March 31, but the appointment of a new CEO will not be on the agenda. Until a new CEO is appointed, KT is likely to remain under emergency management. Commercial law allows Ku to manage KT until a new CEO is appointed, even if his term expires at the end of this month.

However, if Ku decides not to continue, KT will have to appoint an acting CEO. Either way, a management vacuum and delayed executive appointments seem inevitable.

By Na Hyun-joon and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]