KT’s three outside directors withdraw bid to seek extension ahead of AGM

KT Corp. shareholders’ meeting takes place on Mar. 31. [Photo by Yonhap]

KT Corp.’s three outside directors, who were seeking approval to extend their position, have stepped down ahead of a shareholders’ meeting on Friday, days after its chief executive officer nominee quit.

The outgoing board members are Kang Chung-ku, chairman of the current KT board of directors and a professor at Korea University; Yeo Eun-jung, a professor at Chung-Ang University; and Pyo Hyun-myung, former chief executive officer of Lotte Rental Co., according to multiple industry insiders. Agenda to reappoint the three officials will automatically be discarded at the company’s annual shareholders’ meeting.

Their decision to resign came after the National Pension Service, the company’s largest shareholder with a 10.12 percent stake, decided the day before vote against reappointing Pyo because he served in a company within the last five years that has an important transactional relationship with KT, according to the pension fund’s statement. The pension fund took neutral positions regarding the other two.

Furthermore, Hyundai Motor Group, the second largest shareholder with a 7.79 percent stake, also voiced opposition to Pyo, raising speculation that it would be difficult for the shareholders to approve his reappointment. The industry consensus is that the shares of the largest and second largest shareholders are only about 18 percent but their influence on other shareholders is great.

Outgoing directors Kang and Yeo, who had been running the board for three years along with Pyo, seem to have decided to withdraw as Pyo’s reappointment became difficult. Their withdrawals have left Kim Yong-hun, former secretary general of the Constitutional Court of Korea, as the remaining outside director.

KT is expected to ask the three outgoing directors to participate in the board’s decision-making along with Kim until replacements are decided, as the Commercial Act requires a quorum of three or more outside directors. KT estimates it will take about five months to form the next board of directors.

In addition to the agenda for reappointment of outside directors, shareholders at the meeting will approve agendas including financial statements, reporting obligations on treasury stocks, remuneration limits for directors and revising executive severance pay rules.

The initially tabled agenda to appoint Yoon Kyung-lim, head of KT’s transformation division, as new chief executive officer will automatically be discarded due to his withdrawal. Park Jong-wook, KT president and head of its business planning division, who is serving as acting CEO as the current CEO Ku Hyeon-mo stepped down, will chair the shareholder meeting in accordance with the articles of incorporation.