An employee of the Korea Aerospace Research Institute (KARI) founded a startup in virtually the same field as the work handled while employed and was later found in an audit to have won more than 40.16 billion won in contracts from KARI.
According to KARI's comprehensive audit report released by the Korea AeroSpace Administration on the 18th, former KARI employee A founded a startup in 2018 and, through that company and another acquired later, entered into a total of 66 contracts worth 40.16 billion won with KARI.
In 2018, while still at KARI, A established a company whose business area matched the work A was responsible for. A then took a startup leave in 2019, and in 2020, during the leave, acquired a service provider that had performed satellite control tasks for A's department and made it a subsidiary of the startup. A also became the head of that corporation.
The audit found the contracts won by A-related corporations effectively outsourced to an external company the tasks A had performed at KARI. Except for nine of the 66 contracts, most were awarded by private contracts. In particular, 20 low-Earth orbit satellite frequency service contracts carried out by A's startup proceeded with no competing bidders.
Most of the contracts were signed while A was still at KARI or on startup leave. Even after A resigned, eight additional contracts were concluded between the related corporations and KARI.
The problem is that this type of startup fell under a category prohibited by the National Research Council of Science & Technology (NST) guidelines and KARI's startup support rules in effect at the time. Startups that outsourced tasks handled while in service were restricted, but KARI approved A's startup leave.
Potential rule violations also surfaced in the private contracting process. KARI had rules prohibiting private contracts between employees and parties related to their duties, but until the rules were revised in 2022, KARI was found to have signed 12.8 billion won in private contracts with A-related corporations.
Many researchers involved in the contracting were A's predecessors or successors, with direct conflicts of interest. The audit report pointed out that they structured bid proposal evaluation items so that new corporations could receive high scores. During this process, another firm raised concerns about unfairness, but KARI did not accept them, and the firm reportedly gave up bidding after determining the contract favored a particular corporation.
A was found to have received startup support benefits without fully disclosing to KARI the relationship with the acquired service provider. The audit also confirmed indications that A received undisclosed contract information in advance from KARI insiders and provided meals to related employees.
A argued that the startup qualified for support because no specialized corporation in Korea held the relevant technology, and that the acquisition had been reported to KARI when applying to extend the leave, so it was not intentionally concealed. However, the Korea AeroSpace Administration (KASA) did not accept this.
KASA notified KARI to file a criminal complaint against A on suspicion of violating the anti-graft law. It also sought heavy disciplinary action against employees who created preferential contracts and provided undisclosed information. KARI was additionally notified to discipline the employee in charge of approving the startup for neglect of duty.