South Korean prosecutors raided five subcontractors to probe suspected corruption in connection with a few major defense projects.
The prosecutors searched the firms and secured documents and digital materials as evidence related to allegations that KAI made illicit gains by inflating expenses for developing military aircraft, Yonhap reported Tuesday.
The prosecution is investigating KAI on suspicions that the country's sole aircraft manufacturer manipulated spending for developing a utility helicopter known as the Surion.
KAI has been involved in high-profile defense projects, including the development of the Surion, T-50 supersonic trainer jet and FA-50 light attack fighter.
They are looking into the possibility that the subcontractors paid KAI officials bribes in return for giving them supply deals. The probe is pointing to incumbent KAI CEO Ha Sung-yong, with an allegation that he stashed away secret funds over the course of the procurement.
At least two of the companies searched Tuesday are reportedly run by close aides of Ha, and they've heavily depended on KAI orders for revenue.
An earlier probe by the state audit agency estimated the unfair profits at some 24 billion won (US$21.2 million).
The search comes days after they carried out a raid on Friday at KAI headquarters in Sacheon, 437 kilometers south of Seoul, and its offices in the capital in connection with the allegations.
The prosecution is expected to soon bring in Ha for questioning in relation to the allegations. He's been barred from overseas travel upon the prosecutors' request.