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| Marines deploy a K-9 self-propelled howitzer, manufactured by Hanwha Techwin, during an artillery drill on Korea's northernmost Baengnyeong Island in the West Sea. The National Tax Agency investigated the defense unit of Hanwha Group Thursday, a week after the explosion of a K-9 howitzer in Cheorwon, Gangwon Province, in what some industry analysts call the government's widening corruption probe into the defense industry. / Korea Times file photo |
By Lee Hyo-sik
Tax investigators have raided Hanwha Group's headquarters and the offices of its two defense units in what some industry analysts call the government's widening corruption probe into the defense industry.
The National Tax Agency (NTS) said Friday it sent about 100 investigators the previous day to the Hanwha headquarters in Seoul and the offices of Hanwha Techwin in Changwon, South Gyeongsang Province, confiscating financial and other documents.
While searching the group headquarters, they targeted mainly the offices of Hanwha Corp., the holding company that produces gunpowder and ammunition.
The search came a week after a K-9 self-propelled howitzer, manufactured by Hanwha Techwin, exploded during an artillery drill.
The accident, which killed two soldiers and wounded five others, has led the Ministry of National Defense to investigate whether there were any irregularities surrounding the ministry's procurement of the K-9 self-propelled howitzers.
Hanwha Techwin developed the 155-millimeter howitzer for the nation's armed forces in 1998 to replace the K-55 howitzers. The Army has about 1,000 K-9 howitzers deployed, mostly along the Demilitarized Zone.
"As far as we know, the visit by NTS officials is part of a regularly scheduled tax probe," a Hanwha Group official said. "They took necessary materials only from offices of Hanwha Corp. and Hanwha Techwin. Other units were untouched."
However, the search didn't appear to be regularly scheduled because it was executed by a department at the Seoul Regional Tax Service, which conducts an investigation when there is credible evidence of possible tax evasion and other dubious activities.
"It seems the NTS's latest search of Hanwha is part of the government's expanding investigation into widespread corruption in the defense industry," said an executive at a major business association, who declined to be named.
"There have been numerous cases of collusion between military brass and defense company officials over the past few years. The Moon Jae-in administration is now making an example out of the defense industry to show the public that it is doing its best to eradicate corruption and other irregularities in Korea," the executive said.
Korea Aerospace Industries is facing the prosecution's investigation for allegedly creating a slush fund, manipulating accounting books and making intra-group dealings, he said, adding that in the wake of the K-9 howitzer explosion, the probe has reached Hanwha Group.
"I believe other defense companies will also soon be subject to tax or criminal investigations," he said.
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