KAI chief quits over slash fund allegations
Korea Aerospace Industries (KAI) President and CEO Ha Sung-yong resigned Thursday amid ongoing investigations by the prosecution targeting the company and himself over corruption allegations in a number of major defense projects.
Ha’s stepping down followed the resignation of Chang Myoung-jin, the head of the Defense Acquisition Program Administration (DAPA), Wednesday, over allegations that he neglected his duty of supervising KAI, the nation’s sole aircraft maker, and tried to cover this up.
These are the latest resignations of figures appointed by former President Park Geun-hye who was removed from office in March over a massive corruption scandal.
Ha was close to members of Park’s inner circle, while Chang was her classmate and laboratory partner at the Electronic Engineering Department of Sogang University.
Ha’s resignation came after state prosecutors searched KAI headquarters in Sacheon, South Gyeongsang Province, and its office in Seoul last week to gather evidence related to the corruption allegations.
He is suspected of reaping billions of won in illicit gains after the company inflated the costs of developing military aircraft such as the Surion utility helicopter and the T-50 supersonic trainer.
“I decided to step down as I feel deeply responsible for everything that has recently occurred,” Ha said in a statement. “I will sincerely answer questions from prosecutors regarding all the suspicions.”
Ha claimed the ongoing situation should not cause any setbacks in projects pushed for by KAI such as efforts to export T-50s to the United States.
The company said it will arrange an extraordinary shareholders’ meeting as soon as possible to select his successor.
Earlier, prosecutors placed travel bans on Ha and several KAI officials.
A key executive, who was one of the closest aides to Ha at the company, was summoned to the prosecution, Thursday, indicating Ha could soon be questioned.
Chang and two more DAPA working-level officials also face grilling by the prosecution for dereliction of duty after the state auditor accused them, Sunday, of pushing for the deployment of the Surion helicopters despite a series of defects including engine and windshield problems.
DAPA allowed KAI to resume delivery in December 2016, citing the need to maintain DAPA personnel and replace aging helicopters, although the flaws had not been resolved, according to the state auditor.