Hyosung Power & Industrial Systems Performance Group is undergoing a major audit in the aftermath of a series of corruption scandals, sources familiar with the matter said Wednesday.

The Fair Trade Commission recently slapped fines on Hyosung, along with a handful of other local manufacturers, for colluding on the prices of parts they had been supplying to Korea Hydro and Nuclear Power Corp. for up to eight years. 

Hyosung Group said the audit was launched on orders from its vice chairman Lee Sang-woon to get the firm back in shape.

Other sources believe the audit may lead to major layoffs, as Lee reportedly told executives to streamline the business by combining the manufacturer’s noncore businesses and downside the workforce.

“Internal inspections are usually conducted to find excuses for layoffs. Some employees have been called in as many as five times for audits since November,” one source told The Korea Herald.

There is also speculation that the audit may be a part of the group’s moves to remove the remaining right-hand men of former Hyosung PNI president Cho Hyun-moon, who stepped down in February 2013 over a succession battle. His older brother Hyun-joon is widely expected to be the next head of the heavy equipment manufacturer.

Hyun-joon may also be seeking to place more aides in key posts before taking charge, according to industry sources.

Hyosung Group, however, denied such implications, saying that the audit was only aimed at eliminating corruption.

Regarding reports that Hyun-joon, currently heading the group’s information communication and textiles units, laid off more than a dozen aides to his estranged younger brother, those close to the matter said these aides have already been replaced.

Last month, Hyosung announced that it would focus on carbon fiber and polyketone businesses as new growth engines. The company plans to invest about 1 trillion won ($914 million) into the project to achieve 10 trillion won in exports by 2020.

By Suk Gee-hyun (monicasuk@heraldcorp.com)