Former KTF chief faces trial on kickback charges

SEOUL, Oct. 8 (Yonhap) -- The former chief of KTF Co., South Korea's
second-largest mobile carrier, will face trial on charges of taking kickbacks from suppliers, prosecutors said Wednesday.

Cho Young-ju will be indicted on breach of trust charges on Thursday, accused of
pocketing 2.4 billion won (US$1.7 million) in rebates from one of the company's
subcontractors. Prosecutors said, however, they have not found evidence of the
money being used to bribe politicians.
The month-long probe prompted Cho to resign and has significantly restrained the
business prospects of KTF and its parent company, major fixed-line operator KT
Co., who have been seeking new growth engine projects amid market saturation.
Prosecutors dropped more serious charges of bribing politicians of the previous
Roh Moo-hyun administration, saying Cho seems to have used the rebates
personally. They said they found 1 billion won was remitted to a U.S. bank
account as an investment for a movie production in the United States.
"(Investigators,) at the moment, consider the remittance as an investment and
will further track down how it proceeded," a prosecutor at the Seoul Central
District Prosecutors' Office said, requesting anonymity.
Prosecutors initially suspected that the money might have fallen into the hands
of third-party beneficiaries, possibly politicians, but found no evidence.
The head of the subcontractor, who was identified only by his family name Jeon,
was indicted on Tuesday for giving the kickbacks.
The probe was a hard blow to KTF, which was ready to launch ambitious
new-generation projects to beat its larger rival, SK Telecom. KTF was prepared to
merge with KT ahead of the launch of Internet Protocol Television (IPTV) service,
channeled through broadband computer networks and seen as a potential cash cow to
offset declining fixed-line phone business.
hkim@yna.co.kr
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