[2026 National Assembly Audit] "Tens of Billions of Won in Contracts to Employee-Founded Firms"... Misconduct Allegations in KARI, KASI Audits

KARI-Linked Companies Signed KRW 49.8 Billion in Contracts... KRW 28.6 Billion for Satellite Ground Systems Over Six Years
KASI Also Accused of Steering KRW 2.4 Billion in Contracts; Administrator Oh Tae-seok: "Measures to Prevent Recurrence"

Questions were raised during a parliamentary audit about problems with contract management at the Korea Aerospace Research Institute (KARI) and the Korea Astronomy and Space Science Institute (KASI), including hundreds of billions of won in contracts being concentrated among companies founded or acquired by employees. Allegations that contracts were steered to specific companies and that related firms won contracts even after sanctions were imposed have put the oversight system at research institutes under the Korea Aerospace Administration under scrutiny.

At a parliamentary audit by the National Assembly's Science, ICT, Broadcasting and Communications Committee on Oct. 13, Assemblywoman Lee Yeonhee presented audit findings on research institutes under the Korea Aerospace Administration and questioned officials closely about transparency in the contracting process.

A view of the Korea Astronomy and Space Science Institute. The Asia Business Daily database.

According to Lee, companies identified as having been founded or acquired by employees at KARI signed contracts worth a total of 49.8 billion won. Of that amount, contracts worth 28.6 billion won were awarded over six years in the satellite ground system operations and inspection sector alone.

Similar allegations were raised at KASI. Lee said an employee was involved in the actual management of companies connected to relatives or acquaintances, provided them with contract information in advance, and intervened in the preparation of statements of work, steering contracts worth 2.4 billion won to a specific company.

The effectiveness of sanctions barring companies from participating in bidding was also called into question. Lee said there were indications that companies related to a sanctioned firm had secured three additional contracts, including through acquisitions. She said it was necessary to determine whether the sanctions had been properly enforced in the actual contracting process.

Lee acknowledged that the space and aerospace sector is closely tied to national security and requires a high level of expertise, but stressed that these characteristics cannot justify opaque contracting practices. She called for a renewed review of contracts between research institutes and companies founded by current or former employees, as well as institutional safeguards to prevent similar problems from recurring.

Improving Conditions for Researchers Behind Nuri's Success Also a Challenge

The need to improve working conditions for research personnel was also raised, alongside calls for stronger oversight of research institutes.

On Oct. 7, Hwang Jeonga of the Democratic Party of Korea cited the successful fifth launch of Nuri and praised the technologies and experience accumulated over many years by researchers at KARI and KASI as the foundation of South Korea's space development.

Tae seog Oh, head of the Korea Aerospace Administration (KASA), answers lawmakers' questions during a parliamentary audit of the Nuclear Safety and Security Commission and other agencies at the National Assembly on the 13th. Photo by Yoon Dongju

Hwang stressed that public research institutes must maintain the capacity to develop next-generation technologies even as space development shifts to a private-sector-led model. She said working conditions for institute personnel, including young researchers and research administration staff, should be improved so they can continue follow-up research and development rather than stopping at technology transfer.

Hwang asked officials to hear from personnel at KARI and KASI and develop specific measures to improve their working conditions. The Korea Aerospace Administration said it was discussing related measures with the two research institutes.

Regarding contract management, Korea Aerospace Administration Commissioner Tae seog Oh responded, "I believe we need to look into situations where contracts go to a particular company because they are awarded through private contracts or because there are no competing bidders. We will discuss measures with KARI and KASI to prevent such incidents from happening again and report back."

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