BUSINESS

Ex-KAI head arrested over W500b accounting fraud scandal

By Yonhap
  • Published : Sept 23, 2017 - 11:24
  • Updated : Sept 23, 2017 - 11:27

The prosecution arrested a former chief of Korea Aerospace Industries Co. (KAI) Saturday as part of a probe into an accounting fraud case at the nation's sole aircraft maker.

The Seoul Central District Court issued an arrest warrant for Ha Seong-yong, citing the possibility of him fleeing and destroying evidence.
 

Ha Seong-yong, former chief of KAI (Yonhap)

Ha has been detained on a string of charges from accounting fraud and breach of trust to embezzlement. 

Prosecutors believe Ha instructed KAI officials to manipulate the logs of KAI's major supply deals to inflate sales performance.

The amount of fraudulent accounting since Ha took the top post in 2013 is estimated at some 500 billion won (US$440 million), they said. 

The 66-year-old was found to have raised his salary and bonus by some 250 million won and 200 million won, respectively, over the following three years. 

He is also suspected of having a parts supplier set up a company and possessing a stake in it under another person's name. 

Ha has denied any wrongdoing. 

Prosecutors have been investigating the defense company after the state audit agency found KAI officials pocketed as much as 24 billion won by cooking the books regarding major supply deals, including the Surion utility helicopter.

KAI has been involved in a series of mammoth development projects such as the 3 trillion-won export deal of FA-50 light attack aircraft with Iraq. (Yonhap)