Prosecutors Search KAI Offices Again
(Source: The Korea Times; published Juky 26, 2017)
By Jung Min-ho
Korean prosecutors are investigating a wide corruption network at Korea Aerospace Industries, including allegations that company executives stole $48 million by inflating development costs for the Surion helicopter. (KAI photo)
Prosecutors searched the offices of Korea Aerospace Industries (KAI), Wednesday, as part of the widening probe into various corruption allegations surrounding the defense company.

According to the Seoul Central District Prosecutors' Office, investigators searched the firm's headquarters in Sacheon, South Gyeongsang Province, and its Seoul office over allegations it inflated product development costs to reap greater profits.

The move came after prosecutors searched the same places only two weeks ago.

KAI's development division was one of the main targets of the search. Investigators suspect the division played a key role in inflating development costs in major projects.

Prosecutors are also investigating allegations that Ha Sung-yong, the former KAI president who abruptly resigned last week, created slush funds and used some of the money for bribes to aides of disgraced former president Park Geun-hye.

Son Seung-bum, former high-ranking KAI official, has been on the wanted list since Monday on suspicion of playing a central role in creating the funds.

Ha is also accused of abusing his power to help his aides' children get jobs at the company.

Earlier, the Board of Audit and Inspection (BAI) revealed that KAI officials illegally acquired 54.7 billion won ($48 million) by inflating development costs for the Surion helicopter. They, the BAI noted, set up their own companies outside KAI and stole taxpayers' money through business contracts with KAI based on the fake costs.

The BAI said the helicopter fell short in 29 out of 101 categories in the safety test for winter conditions, conducted in the United States from October 2015 to March 2016.

The government may be part of KAI's corruption chain too. According to the Hankook Ilbo, sister paper of The Korea Times, sources confirmed that Ha's aide has worked at the Korea Institute of Aviation Safety Technology, a state-run body that checks the quality of aircraft, since last year.

"It is very inappropriate to let a former KAI official check KAI's products," a source said.

Defense Acquisition Program Administration chief Chang Myoung-jin, who quit last week, is expected to be questioned soon over allegations that he neglected his duty of supervising KAI.

KAI, the country's sole aircraft manufacturer, has been involved in various defense-related projects, including the Surion, T-50 supersonic trainer jet and FA-50 light attack fighter.

On July 17, President Moon Jae-in reaffirmed his pledge to root out deep-rooted corruption in the military, saying it is not an issue of right or left but of patriotism.


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