LIG Defense & Aerospace 因行贿起诉被禁投标24个月，DAPA进一步推动撤销其防务承包商资格，股价早盘大跌7.36%

LIG Defense & Aerospace (079550) is moving to formally defend itself against the Defense Acquisition Program Administration's push to revoke its designation as a defense contractor. With a bidding ban already imposed and its eligibility for negotiated contracts now in doubt, the company is pushing back, saying sanctions are piling up based on nothing more than an indictment.
DAPA recently asked the Ministry of Trade, Industry and Energy to consider revoking LIG D&A's defense contractor designation in connection with a small drone countermeasure project, industry sources said on the 26th.
The designation system allows the government to award negotiated contracts to designated defense companies for weapons systems that cannot be procured reliably through market competition alone. LIG D&A holds the designation for a project to supply jammers and control equipment capable of downing enemy small drones. The company completed development of the small drone countermeasure system this year under a 24.4 billion won ($17 million) contract and had been pursuing a 122.3 billion won ($85 million) mass-production deal on that basis.
But the company now risks losing its eligibility to sign that production contract after one of its executives was indicted on charges of paying hundreds of millions of won in bribes to a DAPA official to win favorable evaluations in a weapons development bid. DAPA on the 20th issued a decision barring LIG D&A from bidding for 24 months, and negotiated contracts may now be blocked as well. The trade ministry plans to decide on revocation after a hearing and then notify DAPA.
LIG D&A says it will mount an active defense in that process. "We deeply regret that such sanctions are being discussed solely on the basis of the indictment, even as legal proceedings to establish the facts are still under way," the company said. "We will faithfully present our position through the established procedures."
Behind the company's resistance is its view of future business. Drones and counter-drone systems have grown in importance amid the war between Russia and Ukraine and conflicts in the Middle East, and the company believes sanctions, if they take effect, could limit its ability to build global competitiveness in unmanned systems.
Any revocation is expected to be limited to this project. Prosecutors investigated six defense programs in connection with the bribery allegations, including the small drone countermeasure system, but revocation is not expected to extend to the others, according to sources.
The company is also taking legal action over the bidding ban. On the 22nd, before the ban was enforced, it filed for a court injunction and brought a suit seeking to overturn the administrative measure.
Separately from its response to the sanctions, the company is accelerating an internal overhaul. On the 19th it replaced four of its seven business and management division heads and created a compliance audit office to review adherence to laws and internal rules. Shin Ik-hyun, chief executive of LIG D&A, and some 300 other executives and employees also held a ceremony declaring a strengthened compliance program.