Court Temporarily Suspends LIG D&A Bid Ban; Nov. 5 to Be Pivotal

[Financial News] A court has temporarily suspended enforcement of the Defense Acquisition Program Administration’s (DAPA) measure barring LIG Defense & Aerospace (LIG D&A) from participating in bids for 24 months. The ban could be lifted depending on the outcome of a hearing on a formal stay scheduled for the 5th of next month.
LIG D&A issued a corrected disclosure on the 27th revising the period of DAPA’s bid ban, as enforcement of the sanction has been suspended through the 20th of next month under a temporary stay. The period was initially set to run from the 29th through October 28, 2028, but has been changed to run from the 21st of next month through November 20, 2028.
LIG D&A said the bid-ban period could be revised again depending on the outcome of the hearing on a formal stay on November 5. If a formal stay is granted, the bid ban will have no effect until a decision is reached in the lawsuit seeking to overturn the measure, which LIG D&A filed on the 22nd along with its application for a stay.
LIG D&A emphasized, “The temporary stay of enforcement of the administrative measure means our eligibility to participate in bids will not be affected in any way through November 20,” adding, “If a formal stay is granted, our eligibility to participate in bids will not be affected in any way until a ruling in the lawsuit seeking to overturn the sanction.”
LIG D&A’s disclosure also detailed the expected impact if the bid ban takes effect. Last year, its revenue from transactions with the central government, local governments and public institutions totaled 2.7773 trillion won, or 64.5% of its total revenue of 4.3069 trillion won.
The bid-ban measure is based on the Public Prosecution Office’s indictment alleging that LIG D&A executives and employees gave a DAPA administrative officer a 320 million won bribe in connection with a solicitation. Industry observers say it is highly unusual to impose a sanction before a first-instance ruling, particularly a 24-month bid ban, the most severe penalty. A major project could face disruption right away: the long-range air-to-air guided missile project for the domestically developed KAI KF-21 Boramae fighter will inevitably be delayed if LIG D&A is not involved.
The previous day, LIG D&A CEO Shin Ik-hyun appeared at a comprehensive audit by the National Assembly’s National Defense Committee and emphasized, “It is structurally impossible for the company to come up with more than 300 million won (in bribes).” Asked whether he felt a moral responsibility, he said, “We take the disgraceful incident very seriously, and I deeply feel my responsibility as CEO,” and outlined measures to strengthen the company’s compliance management system.
[email protected] Kim Yun-ho Reporter