“Even Revoking the Designation on Top of a Bidding Ban Is Excessive” ... Ruling and Opposition Parties Unite to Push Back Against LIG Sanctions

[Financial News] Criticism was voiced in the National Assembly that the Defense Acquisition Program Administration’s decision to bar LIG D&A from bidding for two years and its subsequent request to revoke the company’s designation as a defense contractor were excessive. Lawmakers from both the ruling and opposition parties stressed that sanctions for an individual company’s illegal conduct must not undermine the competitiveness of the national defense industry. The government also said it would comprehensively consider the fairness of the sanctions and their potential impact on the industry.
At a plenary meeting of the National Assembly’s Trade, Industry, Energy, SMEs and Startups Committee on the 13th, People Power Party lawmaker Koo Ja-geun said, “DAPA barred the company from bidding for two years over allegations including bribery and cost irregularities. It is unusual to have also requested revocation of its designation as a defense contractor.”
Koo said, “Defense contractors are not built overnight; they have accumulated technology and know-how over a long period. I question whether revoking the designation all at once is the right thing to do, given the implications for national competitiveness and industrial infrastructure.”
He particularly questioned whether the sanctions were fair compared with cases involving other defense contractors in the past. Citing Hanwha Systems, HD Hyundai Heavy Industries and Korea Aerospace Industries (KAI), Koo stressed, “Illegal conduct must be punished strictly, but revoking a company’s designation as a defense contractor goes beyond the issue of one company and affects the competitiveness of the national defense industry.”
Similar criticism came from the ruling party. Lee Eon-ju, a lawmaker from the Democratic Party of Korea (DPK), said, “A defense contractor designation is a comprehensive recognition, at the national level, of capabilities accumulated over time. It is an entirely different matter from the illegal conduct of an individual involved.”
She continued, “It is absurd even to talk about revoking the designation as a defense contractor on that basis. There is no need to waste time on something not worth a moment’s consideration.”
Kim Sung-won, chair of the committee, also urged the Ministry of Trade, Industry and Energy not to simply follow recommendations from DAPA, a vice-minister-level agency, but to examine them closely, saying, “I hope it will avoid the mistake of letting an individual’s misconduct shake the entire national defense industry.”
In response, Trade, Industry and Energy Minister Kim Jung-kwan said, “I agree with most of the points you raised. We will make a balanced judgment, comprehensively considering the gravity of the matter, fairness in light of past sanctions, and the special circumstances facing the defense industry.”
The Ministry of Trade, Industry and Energy is currently reviewing DAPA’s request to revoke the company’s designation as a defense contractor. A final decision on revocation has not yet been made.

[email protected] Kim Kyung-min Reporter