Largest South Korean Telecommunications Co. Agrees to Pay the SEC to Settle FCPA Charges
KT Corporation, South Korea's largest telecommunications operator, agreed to pay $6.3 million to settle SEC charges of violating the Foreign Corrupt Practices Act by making improper payments to government officials in Korea and Vietnam.
KT Corporation, South Korea's largest telecommunications operator, has agreed to pay $6.3 million to settle SEC charges of violating the Foreign Corrupt Practices Act. The company will pay $3.5 million in civil penalties and $2.8 million in disgorgement for lacking sufficient internal accounting controls and anti-corruption policies. The alleged fraud involved KT Corp. employees generating slush funds through charitable donations, third-party payments, and other means, which were used for gifts and illegal political contributions.
KT Corporation, South Korea's largest telecommunications operator, has agreed to pay $6.3 million to settle SEC charges of violating the Foreign Corrupt Practices Act by making improper payments to government officials in Korea and Vietnam. The alleged fraud involved KT Corp. employees generating slush funds through charitable donations, third-party payments, and other means, which were used for gifts and illegal political contributions. The company lacked sufficient internal accounting controls and anti-corruption policies, leading to nearly a decade of FCPA violations. KT Corp. consented to the SEC's order without admitting or denying the findings, and will pay $3.5 million in civil penalties and $2.8 million in disgorgement for violating the books and records and internal controls provisions of the Securities Exchange Act. The case followed a November 2021 criminal indictment in South Korea against KT Corp. and 14 executives for related illegal political contributions. The SEC's investigation found that KT Corp.'s misconduct spanned nearly a decade, with funds funneled to influence business decisions in both Korea and Vietnam.
Exhibits & Attached Documents (1)
Extracted insights
- $6.30M $6.3 million $1M–$10M
- $3.50M $3.5 million $1M–$10M
- $2.80M $2.8 million $1M–$10M
- person charles cain
- agency chief of sec enforcement division's fcpa unit
- company kt corporation
- person kt corporation employees
- agency sec investigation of kt corporation
- agency Securities and Exchange Commission
- person south korean authorities
- person sufficient internal accounting controls
- person tracy l. price
- KT Corporation will pay $6.3 million to resolve FCPA charges
- KT Corporation violated Foreign Corrupt Practices Act
- KT Corporation provided improper payments to government officials in Korea and Vietnam
- KT Corporation lacked sufficient internal accounting controls
- KT Corporation employees generated slush funds for gifts and illegal political contributions
- KT Corporation agreed to pay $3.5 million in civil penalties and $2.8 million in disgorgement
- South Korean authorities indicted KT Corporation and 14 executives in November 2021
- Charles Cain is Chief of SEC Enforcement Division's FCPA Unit
- SEC conducted investigation by Ilana Z. Sultan, Steven Susswein, and M. Shahriar Masud
- Tracy L. Price supervised SEC investigation of KT Corporation
The Securities and Exchange Commission announced that Seoul-based KT Corporation (KT Corp.) will pay $6.3 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) by providing improper payments for the benefit of government officials in Korea and Vietnam. According to the SEC’s order, KT Corp., South Korea’s largest telecommunications operator, engaged in multiple schemes to make improper payments in Korea and Vietnam. KT Corp. lacked sufficient internal accounting controls over charitable donations, third-party payments, executive bonuses, and gift card purchases. As a result, KT Corp. employees, including high-level executives, were able to generate slush funds that were used for gifts and illegal political contributions to government officials in Korea who had influence over KT Corp.’s business. Other employees were able to make payments in connection with seeking business from government customers in Vietnam. "For nearly a decade, KT Corp. failed to implement sufficient internal accounting controls with respect to key aspects of its business operations, while at the same time lacking relevant anti-corruption policies or procedures. Issuers must be sure to devote appropriate attention to meeting their obligations under the FCPA," said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit. In November 2021, South Korean authorities indicted KT Corp. and 14 executives for criminal violations related to illegal political contributions from the slush funds. KT Corp. consented to the SEC’s order without admitting or denying the findings that it violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934, and agreed to pay approximately $3.5 million in civil penalties and $2.8 million in disgorgement. The SEC’s investigation was conducted by Ilana Z. Sultan, Steven Susswein, and M. Shahriar Masud and supervised by Tracy L. Price.
The Securities and Exchange Commission announced that Seoul-based KT Corporation (KT Corp.) will pay $6.3 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) by providing improper payments for the benefit of government officials in Korea and Vietnam. According to the SEC’s order, KT Corp., South Korea’s largest telecommunications operator, engaged in multiple schemes to make improper payments in Korea and Vietnam. KT Corp. lacked sufficient internal accounting controls over charitable donations, third-party payments, executive bonuses, and gift card purchases. As a result, KT Corp. employees, including high-level executives, were able to generate slush funds that were used for gifts and illegal political contributions to government officials in Korea who had influence over KT Corp.’s business. Other employees were able to make payments in connection with seeking business from government customers in Vietnam. "For nearly a decade, KT Corp. failed to implement sufficient internal accounting controls with respect to key aspects of its business operations, while at the same time lacking relevant anti-corruption policies or procedures. Issuers must be sure to devote appropriate attention to meeting their obligations under the FCPA," said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit. In November 2021, South Korean authorities indicted KT Corp. and 14 executives for criminal violations related to illegal political contributions from the slush funds. KT Corp. consented to the SEC’s order without admitting or denying the findings that it violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934, and agreed to pay approximately $3.5 million in civil penalties and $2.8 million in disgorgement. The SEC’s investigation was conducted by Ilana Z. Sultan, Steven Susswein, and M. Shahriar Masud and supervised by Tracy L. Price.