Over 100 investigators raided premises of the Korean Aerospace Industries (KAI) today looking for evidence to prove charges of inflating research and development (R & D) cost of a defence project and swindling funds.
The Seoul Central District Prosecutors’ Office conducted the raid on the headquarters of KAI, located in Sacheon, South Gyeongsang Province, and its Seoul branch to seize materials for evidence such as hard disks and documents. KAI gets funding from the state-run Defence Acquisition Program Administration (DAPA) and other government bodies to conduct R & D. The project in which the alleged swindling happened was not made public, Korea Herald reported.
Prosecutors have looked into the alleged fraud since the Board of Audit and Inspection of Korea in 2015 implied KAI had extorted some 54.7 billion won ($48.1 million) in sum, partly by fabricating the source of investments from DAPA in the development project of Surion. KAI claimed the money is not illicitly gained, citing the risk of brokering the investors.
KAI is the nation‘s only aircraft manufacturer, with its major stakeholder, the Export-Import Bank of Korea holding 26.41 percent of shares as of June 30, after 18.68 percent of shares were handed over from the former major shareholder, the Korea Development Bank.