2017/09/13 17:56
SEOUL, Sept. 13 (Yonhap) -- Prosecutors investigating
accounting fraud allegations at South Korea's sole aircraft manufacturer
related to a helicopter project are broadening inquiries into new suspicions
that the company may also have cooked the books in connection with a mammoth
state project to build fighter jets locally, prosecution officials said
Wednesday.
The Seoul Central District Prosecutors' Office has been
investigating the former chief and other officials at Korea Aerospace
Industries Co. (KAI) over allegations that they gained illicit profits by
manipulating expenses in the manufacturing of the utility helicopters known as
the Surion.
The prosecutors also suspect KAI inflated the value of
the proceeds from the sale of a light attack aircraft, the FA-50, to Iraq, in a
deal worth some 3 trillion won (US$2.65 billion).
One KAI executive was arrested early this month and
another is awaiting a court decision on the prosecution's request for his
arrest warrant.
The prosecutors' office said it uncovered some
circumstantial evidence that indicates top officials may have worked together
in cooking the books for the 18 trillion won KF-X project, ordered by the
government in 2015 to develop Korea's own advanced fighter jets and produce
more than 120 planes until 2026.
The prosecution secured documents that suggest its former
chief Ha Sung-yong was briefed on the situations, the prosecution said. Ha
stepped down soon after the investigation began in July. The prosecution is
expected to call in Ha soon for questioning.
KAI has been involved in high-profile defense projects
including the Surion, T-50 supersonic trainer jet and others. The fraud
allegations were first raised in 2015 when the state auditor's inspection found
that KAI pocketed some 24 billion won in illicit profits by manipulating
development costs in the Surion project.
According to KAI's financial reports, the company saw its
revenue soar 53 percent to 3.1 trillion won from 2013 to 2016. Its operating
profit also doubled to 314.9 billion won during the same period.
The government established KAI in the wake of the Asian
financial crisis in the late 1990s by combining ailing private defense
companies. The government injected about 8 trillion won worth of taxpayer money
to salvage the firm.
(END)
Original post: yonhapnews.co.kr
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