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KT Corp. CEO Offers to Quit After Prosecutors Raid Headquarters

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Outgoing KT CEO Lee Suk Chae
Lee Suk Chae, outgoing chief executive officer of KT Corp. Photographer: Haruyoshi Yamaguchi/ Bloomberg

Nov. 4 (Bloomberg) -- KT Corp., South Korea’s second-largest mobile operator, said Chief Executive Officer Lee Suk Chae offered to resign after prosecutors raided the company’s headquarters and his home.

The board will soon decide the resignation date and discuss a successor to Lee, who also held the role of chairman, the Seongnam, South Korea-based carrier said in an e-mailed statement yesterday.

Prosecutors raided KT’s headquarters and Lee’s home last month as they investigate allegations the company incurred losses on asset selloffs and bad investments. People’s Solidarity for Participatory Democracy, a South Korean civic group, filed a lawsuit against the chairman in February, alleging Lee caused about 80 billion won ($75 million) of losses to the company by selling property too cheaply.

“Seeing executives and staff members suffering, I could no longer delay the resignation,” Lee said in an e-mail to employees yesterday. “I am also open to disclose all my salary and stock bonuses, if the company can be freed from the recent allegations and speculations.”

KT didn’t sell assets at low prices, Kim Dong Woo, a spokesman for the company, said by phone today.

Shares of KT fell 1.6 percent to 34,650 won as of 11:52 a.m. in Seoul. The stock has fallen 2.5 percent this year compared with a 1.6 percent advance for the benchmark Kospi index.

To contact the reporter on this story: Jungah Lee in Seoul at jlee1361@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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