LIG D&A Faces Defense Procurement Corruption Probe Amid Questions Over Event Hosting [Reporter's Notebook]

LIG D&A, one of the prominent names in South Korea's defense industry, has been embroiled in a defense procurement corruption scandal. An official from the Defense Acquisition Program Administration (DAPA) has already been arrested on charges of taking hundreds of millions of won in bribes. Prosecutors are reportedly targeting two senior executives at LIG D&A as the source of the bribes. If it is proven that LIG D&A funneled bribes to the DAPA official, the company will face massive liability.

While K-defense has outwardly appeared to be thriving, a large-scale defense procurement corruption scheme seems to have been brewing underneath. Following the failure to secure Canada's submarine project, voices of self-reflection are emerging, suggesting that the success of K-defense was hollow on the inside. Judging by the pattern of the LIG D&A-DAPA case, many point out that the symptoms of internal rot are severe.

Understandably so, LIG D&A hosted a large-scale event related to a project by inviting a pool of potential evaluators for that very project, which the company claims it is staking its survival on. Criticism is mounting that the company blatantly committed unfair practices akin to corruption right in the middle of a prosecution investigation into defense procurement irregularities. This demonstrates that the symptoms of internal rot are running deep. One way or another, the atmosphere surrounding K-defense is turbulent.


The corruption allegations involving LIG D&A and DAPA are being investigated by the Suwon District Prosecutors' Office. Summarizing reports to date, a DAPA official, surnamed A, was arrested on the 10th on charges of receiving approximately 460 million won in cash and valuables from LIG D&A between 2021 and 2023. Arrest warrants for LIG D&A's Vice Division Head B and Headquarters Head C, who are accused of giving bribes to official A, were reportedly dismissed by the court on the grounds that "sufficient evidence has been collected."

LIG D&A has dismissed the allegations, shifting the blame by claiming, "How could a company of LIG D&A's size give hundreds of millions of won in bribes to a DAPA official?" and calling it "sabotage by a competitor." However, a source well-versed in the investigation told reporters, "An affiliate of LIG D&A run by a relative of the DAPA official is pointed to as the conduit for the bribes, and it is presumed that the bribes were delivered through that relative's account." Another source said, "I understand that the evidence of the bribe delivery secured by prosecutors consists of messenger chats between the two LIG D&A executives." It is unusual to see high-ranking defense industry figures taking center stage in what has historically been a rare occurrence in defense procurement scandals.

The rewards for the bribes are cited as the bidding victories for two projects: the electronic warfare aircraft development project and the tactical data link system Link-22 development project for the Changbogo-II submarine. Prosecutors appear to believe that the DAPA official in charge provided various favors to LIG D&A from the core technology research stage to the final aircraft development stage. It is also reported that circumstances pointing to corruption have been confirmed in the Changbogo-II Link-22 project, with DAPA allegedly handing over project-related information to LIG D&A in advance and giving it high scores in evaluations.

LIG D&A has recently enjoyed an unbroken winning streak in domestic projects, maintaining an undefeated record across six or seven biddings. Among them, two projects have now become subjects of defense procurement corruption allegations. Depending on the outcome of the investigation and trials, the company could face sanctions such as the forfeiture of project qualifications or, more severely, a three-year ban from participating in government projects. It must also endure the disgrace of having achieved its winning streak through corruption and the stigma of being labeled a defense procurement corruption company. This is a life-or-death crisis for LIG D&A.


LIG D&A, caught right in the middle of the defense procurement corruption probe, should have exercised more caution than ever. Instead, it held an event that warrants a closer look. It was the aviation guided weapons and avionics development seminar hosted by LIG D&A on the 15th at the OSCO Convention Center in Cheongju, North Chungcheong Province. About 350 defense experts from the public, private, and military sectors attended, including Park Tae-shik, head of the Missile System Business Division at LIG D&A, and Air Force Logistics Commander Park Jong-woon.

What caught the attention of defense experts was the "Success Strategy for Long-Range Air-to-Air Guided Missile System Development" presented by LIG D&A at the event. It was a detailed report on how LIG D&A plans to tackle the long-range air-to-air guided missile system development project, for which a project notice is scheduled to be issued within this year. Having publicly declared that its corporate life is staked on the long-range air-to-air project, LIG D&A invited officials from the Ministry of National Defense, DAPA, and the Air Force who hold the power over the project's fate, wined and dined them, showered them with gift packages, and pitched its strategy for the long-range air-to-air project.

A defense expert working as a university professor criticized the move, saying, "Both the side that recklessly invited them and the side that came running are equally thoughtless." An official in the defense industry pointed out, "Since players and referees held deep discussions about an upcoming big game in a cozy, quiet setting where entertainment and gifts were exchanged, it felt like witnessing the prelude to defense procurement corruption." On one hand, criticisms are emerging that "authorities from the Ministry of National Defense, the Air Force, and DAPA who attended the event should be excluded from all processes of the long-range air-to-air guided missile system development project," while on the other hand, realistic lamentations are heard that "if you exclude them, the project cannot run."

The attitude of LIG D&A in hosting an event despite public backlash at a time when the shackles of a prosecution investigation that could shake the entire company are tightening rapidly is hard to comprehend. LIG D&A may have been temporarily blinded and emboldened by the defense boom, leading to a lapse in discipline and vigilance. While the general atmosphere across the K-defense sector seems similar, LIG D&A's behavior appears particularly severe.
※ Please note: This article was translated by AI and may contain errors.