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  • ​Former KAI boss arrested as fraud probe continues

​Former KAI boss arrested as fraud probe continues

A fraud probe into Korea Aerospace Industries has continued, with South Korean authorities placing the company's former chief executive under arrest.

Media reports from South Korea indicate that Ha Seong-yang, chief executive of the embattled contractor from 2013 to mid-2017, was detained on 22 September.

Days earlier, company vice-president Kim In-Sik was found dead at his apartment with a suicide note. Kim worked for the company's international division, and played a role the company's efforts to sell variants of the T-50 trainer aircraft internationally.

Ha reportedly denies the allegations, which include profiteering, accounting fraud, and embezzlement. Aircraft programmes involved in the probes include the KUH-1 Surion utility helicopter, T-50, and KFX.

KAI, however, still plans to have a presence at the upcoming Seoul ADEX defence show.

KAI's legal troubles started in July, when South Korean prosecutors twice raided KAI offices in Seoul and Sacheon, seizing documents and computers.

The KAI allegations also include Chang Myoung-Jin, the former chief of South Korea's powerful Defense Acquisition Program Administration (DAPA). Chang was forced to leave DAPA in July on allegations he did not subject KAI to appropriate oversight.

Until the recent allegations, KAI was seen as a success story. It has sold T-50 variants to the Philippines, Indonesia, Thailand, and Iraq. The Republic of Korea Air Force (ROKAF) uses the T-50 in a training capacity, and is acquiring the FA-50 light attack variant to replace types such as the Northrop F-5E Tiger II and F-4 Phantom.

The company has also enjoyed international success with its KT-1 basic trainer.

The T-50 forms the basis of Lockheed Martin's bid for the lucrative T-X trainer competition. It is unclear what impact the turmoil at KAI will have on this effort.

The company also has aerostructures work on both military and civilian aircraft programmes.

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