Korea Aerospace Industries Co., (KAI) the country's sole aircraft manufacturer, said Thursday the company's CEO will step down after prosecutors raided offices last week on allegations of corruption in major defense projects.
KAI CEO Ha Sung-yong will offer to resign when the board of directors meets later in the day. And the company will arrange an extraordinary shareholders' meeting as soon as possible to select his successor, KAI said in a statement.
Last Friday, prosecutors raided KAI's headquarters in Sacheon, 437 kilometers south of Seoul, and its office in Seoul to gather evidence related to allegations that the company inflated expenses for the development of military aircraft and pocketed illicit gains in the process.
Ha and several KAI officials have been barred from leaving the country pending the investigation. They are expected to face questioning after the prosecution finishes analyzing the seized materials.
KAI has been involved in high-profile defense projects to develop the Surion utility helicopter, T-50 Golden Eagle supersonic trainer jet and FA-50 light attack fighter.
In 2015, state auditors found KAI gained illicit profits worth 24 billion won ($21 million) by manipulating development costs for the Surion project. (Yonhap)