Largest South Korean Telecommunications Co. Agrees to Pay the SEC to Settle FCPA Charges

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.