KT Corp Chief Offers to Resign

SEOUL--The chief executive of South Korea's biggest fixed-line operator, KT Corp. (030200.SE), has offered to resign amid a widening corruption probe, which could delay the company's ambitious plans to boost revenue through overseas mergers and acquisitions.

Lee Suk-chae, a 68-year-old former communications minister who has been leading the company for four years, submitted his resignation letter to the board late Sunday, KT said in a statement.

"I deeply apologize for the damage that has been incurred on KT's [brand] image because of the recent series of events," Mr. Lee was quoted as saying in the statement. He added that he would do his best to clear any allegations made against him until his departure.

Earlier this year, a non-governmental organization accused Mr. Lee of various charges relating to breach of trust, one of the key allegations being the undervalued sale of office buildings owned by KT.

The organization accused Mr. Lee of having sold several office properties at prices below their estimated market value, resulting in a loss for the company of over 80 billion won ($75 million). KT has denied such allegations.

Between 2010 and 2012, KT sold 39 office buildings in various locations as a means to better manage its real estate assets, according to the company.

In October, the prosecutor's office raided KT's offices in Seoul as part of an ongoing investigation into the allegations against Mr. Lee but has yet to release its findings.

KT, which has been in fierce competition with SK Telecom Co. (017670.SE) to attract more mobile subscribers, reported a third-quarter net profit of 136 billion won Friday, down 63% from a year earlier.

As a means to boost its overseas revenue, the company has been trying to buy or invest in overseas companies, a move that may have to be put on hold until it appoints a new chief executive. In April, a person familiar with the matter said KT was close to signing a deal to buy an African internet service provider from Telkom S.A. (TKG.JO).

Write to Min-Jeong Lee at [e-mail]

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