How Far Will Sanctions Go in the LIG D&A Corruption Case [Yang Nakkyu's Defence Club]

DAPA Official Served as Project Evaluation Committee Member in Bribery Case
Up to 5-Year Bidding Ban for Executive Violations of Integrity Oath

The Defense Acquisition Program Administration (DAPA) announced that if a criminal connection is confirmed between its employees and the LIG D&A corruption case, it will cancel contracts that have already been concluded. However, if the project has progressed 70 to 80 percent, canceling the contract could delay force integration by several years. Therefore, DAPA said it will take into account the progress of each project and the potential national loss in its overall assessment.

On the 9th, at COEX in Gangnam-gu, Seoul, a hybrid transport drone was exhibited at the LIG booth during the "2025 Unmanned Mobility Industry Expo." July 9, 2025. Photo by Jinhyung Kang

On August 18, DAPA Commissioner Lee Yongcheol met with reporters and said, "I am deeply sorry that another unfortunate incident has occurred for the first time in 11 years since the 2015 bribery case involving a working-level employee. Although the incident did not occur during my term, as the head of the agency, I feel responsibility."

The Suwon District Prosecutors' Office indicted a DAPA official for accepting tens of millions of won in bribes and gains from LIG D&A during the bidding process of a weapons system development project. The official is accused of providing internal information on the project and serving as a proposal evaluation committee member, allegedly awarding favorable scores to LIG D&A. The LIG D&A official accused of offering the bribe has also been arrested and is under investigation.

The DAPA official participated as a proposal evaluation committee member in four out of fourteen LIG D&A-related projects, with LIG securing three of those projects. In the electronic warfare project, which was suspected to be connected to the corruption, it was confirmed that the official did not participate as a committee member.

Going forward, DAPA will determine the sanctions against LIG D&A based on the legal status of the individual who gave the bribe, applying either the Defense Program Act or the State Contract Act. If an official representative or executive is found to have violated the integrity oath, LIG D&A could face a bidding suspension of at least six months and up to five years under the Defense Program Act, and this cannot be substituted by a penalty payment. However, if the bribe-giver is deemed an employee but not an executive by law, the State Contract Act may be applied. While the State Contract Act also prescribes bidding participation restrictions in principle, if this prevents valid competition and is likely to result in significant national loss, a penalty payment can be imposed instead, allowing continued bidding participation.

The issue is that if Hanwha Aerospace, a competitor of LIG D&A, is also sanctioned due to the recent explosion accident, it will be difficult to find alternative business operators for a significant number of defense projects including guided weapons. As a result of the explosion at Hanwha Aerospace's Daejeon plant in June, five workers died. If Hanwha Aerospace officials are prosecuted for this matter in the future, they could also become subject to bidding suspension under the State Contract Act.

A DAPA official said, "If both companies are restricted from bidding, there could be situations where we cannot conclude a private contract with any party. The options become complex, such as whether to impose penalty payments on both, only one, or whether to make overseas purchases or postpone projects for a certain period."

This content was produced with the assistance of AI translation services.