LIG D&A CEO Shin Ik-hyun: “Structurally impossible to raise 300 million won for bribes”

[Financial News] On the 26th, Shin Ik-hyun, CEO of LIG Defense & Aerospace (LIG D&A), ruled out the possibility of raising more than 300 million won for bribes, saying it was procedurally impossible, in connection with allegations of bribery involving the Defense Acquisition Program Administration (DAPA).
Appearing as a witness at the National Assembly’s comprehensive audit by the National Defense Committee that day, Shin stressed in response to Reform Party lawmaker Cheon Ha-ram’s questions about the DAPA bribery case: “It is structurally impossible for the company to raise more than 300 million won [for bribes].”
Prosecutors previously indicted those involved on suspicion that a DAPA official received money in exchange for favorably evaluating LIG D&A during the assessment of proposals for six defense projects worth a total of 91.5 billion won between 2021 and 2025. The alleged amount was 320 million won, rising to 460 million won when a separate alleged amount related to the selection of partner companies is included.
Prosecutors believe LIG D&A raised the funds by increasing a subcontractor’s contract payments and then gave a bribe, along with a solicitation, to a DAPA official involved in bid evaluations. The official in question and the subcontractor’s CEO have admitted to the allegations, while two LIG D&A employees implicated in the case have pleaded not guilty.
Cheon said that LIG D&A had attributed the two increases in subcontractor payments—which prosecutors view as a channel for raising the bribe money—to a request from the military, while DAPA denied having made any such request. He then demanded to know, “Who is lying?”
Shin said it was true that the military had made the request, and rebutted DAPA’s denial, saying, “That differs from what I was told.”
LIG D&A reportedly has a competitive advantage in the six defense projects identified as targets of the alleged solicitations. According to Cheon, in two of the cases, the companies ranked first and second switched places after the official in question intervened in the evaluation. The projects involve intelligent signal-detection technology and electronically scanned radar counter-jamming technology at the Korea Research Institute for Defense Technology Planning and Advancement (KRIT).
Meanwhile, DAPA decided to impose a 24-month ban on participation in bids—the most severe penalty under the State Contracts Act—in connection with the bribery case, even though no first-instance ruling had been issued. Because bidding restrictions can be devastating to defense companies, the decision sent shockwaves through the industry, marking a departure from DAPA’s previous practice of refraining from readily imposing severe penalties even after final court rulings.
With the bidding restriction set to take effect on the 29th, LIG D&A has announced plans to take legal action, including applying for a stay of execution and filing a suit to have the measure revoked. Industry observers say the restriction could be devastating for LIG D&A, given that 80% of its revenue comes from domestic sales. There are particular concerns that the project for a long-range air-to-air guided missile to be mounted on the domestically made KF-21 fighter could be disrupted.
However, separate from the facts of the case, Shin said he felt a deep sense of responsibility for the incident having occurred.
In response to a question from People Power Party lawmaker Yoo Yong-won about whether he felt a moral responsibility, Shin said, “I take the disgraceful incident very seriously and feel a deep sense of responsibility as CEO.” He also outlined measures to prevent a recurrence, explaining that the company had launched a task force (TF) when the indictments were made to strengthen its compliance management system, and had established a compliance audit office to reinforce internal controls.
[email protected] Kim Yun-ho Reporter