South Korea's Defense Acquisition Program Administration is weighing additional sanctions against LIG Defense & Aerospace (079550), including revoking its designation as a defense contractor, after company executives were put on trial over alleged bribery. Losing that designation on top of an existing bidding ban would also bar the company from winning a no-bid contract for mass production of a counter-drone system.
The agency recently asked the Ministry of Trade, Industry and Energy to consider revoking LIG D&A's defense contractor designation for the small drone countermeasure program, the agency said on the 25th. LIG D&A has already been barred from bidding on government contracts for two years after an executive allegedly paid hundreds of millions of won in bribes to an agency official during a weapons development tender.
The bidding ban blocks the company only from new tenders, leaving it eligible for no-bid contracts available to designated defense contractors. If the designation is revoked, the company would also be shut out of a mass-production contract for the program. The small drone countermeasure project, worth 122.3 billion won in total, aims to procure equipment that disables enemy drones through electronic interference such as jamming signals.
The agency is also considering revoking the company's defense cost management system certification over alleged cost irregularities. If the certification is withdrawn, the agency plans to claw back the 1% incentive profit it had paid in addition to costs. The amount subject to recovery is estimated at tens of billions of won.