Korea Aerospace Industries (KAI) is reeling following raids by state prosecutors of its offices and those of key suppliers.
Media reports from South Korea, including from official news agency Yonhap say that KAI's offices in Seoul and Sacheon have been raided amid allegations of corruption and profiteering from various military aerospace projects.
In addition, a series of suppliers to the South Korean airframer have also been raided.
KAI did not reply to repeated requests for comments. A source, however, confirms that the raids occurred.
South Korean media indicates that prosecutors from the Seoul Central District Prosecutors' Office had obtained a warrant from a Seoul court.
During the raids prosecutors reportedly seized files, computers, and mobile phones. Company chief executive Ha Sung-yong has reportedly been suspended from overseas travel pending questioning.
KAI is involved in several high profile military aircraft programmes including the KUH-1 Surion helicopter, and the T-50 – which forms the basis of Lockheed's bid for the coveted T-X trainer programme in the United States. It is also the prime contractor for South Korea's ambitious KFX fighter programme.
In addition, KAI has a substantial aerostructures business, with work on virtually all Airbus and Boeing commercial aircraft programmes. It also has workshare on several other aircraft programmes from various manufacturers.