The Fair Trade Commission launched on-site investigations into Hanwha Aerospace and Korea Aerospace Industries (KAI) over alleged unfair subcontracting practices in the defense industry.
According to the industry on the 3rd, the Fair Trade Commission on this day dispatched investigators to Hanwha Aerospace's headquarters in Changwon, South Gyeongsang, and KAI's headquarters in Sacheon on suspicion of violating the Fair Transactions in Subcontracting Act, and is securing materials and questioning related personnel.
The two companies are suspected of engaging in unfair acts such as demanding technical data, failing to pay, and cutting unit prices in the process of transacting with subcontractors in recent years. The Fair Trade Commission is investigating each matter separately, and in KAI's case, it is also facing allegations of violating the Fair Trade Act.
The Fair Trade Commission believes major defense companies have repeatedly engaged in unfair transactions, such as unilaterally adjusting supply unit prices or demanding technical data. In particular, indications that such acts occurred intensively in the aviation sector were detected, and it is known that this was set as a priority for investigation.
President Lee Jae-myung said at the "defense industry development strategy meeting" held on the 20th of last month, "Since a huge amount of taxes is invested in the defense sector, if large companies commit unfair practices such as squeezing costs or stealing technology, we will impose strong sanctions."
An official at the Fair Trade Commission said, "We cannot confirm specific matters regarding the ongoing investigation."