KT Freetel: CEO Young-Chu Cho Resigns Amid Kickback Charges

SEOUL -(Dow Jones)- South Korea's KT Freetel, Monday said Chief Executive Young-Chu Cho has resigned amid allegations he took kickbacks from suppliers in return for buying their products.

"He has stepped down from his post and KT Freetel will soon hold a board meeting to choose his successor," the company said in a statement.

A company spokeswoman said he's now detained by prosecutors for questioning and can't perform his duty as chief executive properly.

Prosecutors allege that Cho took at least KRW2.5 billion ($2.2 million) in rebates from mobile parts suppliers in return for buying their handset equipment and routers, according to Yonhap news agency. Some of the illegal money might have been given to key figures of the former administration for business favors, Yonhap said.

Officials and prosecutors at Seoul Central District Court couldn't be immediately reached by Dow Jones Newswires for comment.

KT Freetel, the country's second-largest mobile carrier by revenue after SK Telecom, said Friday prosecutors raided its headquarters and seized documents for investigation.

-By In-Soo Nam, Dow Jones Newswires; 822-2198-2234; In-Soo.Nam@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 22nd September 2008