[Courtesy of KAI]
Prosecutors indicted ten former and incumbent executives of South Korea's sole aircraft manufacturer, Korea Aerospace Industries (KAI), in a probe into corruption in developing and producing military aircraft.
They would stand trial on charges that included accounting fraud, embezzlement, bribery, price manipulation and backdoor hiring. The aircraft manufacturer involved in crucial defense projects has been dogged by allegations that it earned illicit gains by inflating expenses.
Former CEO Ha Seong-yong was accused of playing a key role in the scandal that came after President Moon Jae-in ordered a strong drive to eradicate corruption in the defense industry, calling it "an act of making a hole in our national security and benefiting the enemy".
Ha allegedly cooked books by inflating 536 billion won (471 million US dollars) in sales and 46.5 billion won in net profit from 2013. He and other executives are suspected of conspiring to take 651 billion won in loans, sell corporate debts based on the fraudulent balance sheet, and pocket improper bonuses worth some 7.3 billion won.
On September 21, KAI vice president Kim Yin-sik was found to have hanged himself in his apartment in the southeastern city of Sacheon.
Ha stepped down in July after state auditors detected grave technical faults in Surion, the home-made transport utility helicopter developed with technical assistance from the helicopter division of Europe's Airbus Group. Delivery of the KUH-1 Surion, a twin-engine chopper, has been suspended.
To replace an aging fleet of utility helicopters, the Surion project worth 1.3 trillion won was launched in 2006. Since its development was completed in July 2012, 60 Surion choppers have been delivered to the army.
reporter
Lim Chang-won
cwlim34@ajunews.com
