[Alpha Biz= Kim Jisun] Seoul, September 30 – HD Hyundai Heavy Industries (HD HHI) has strongly objected to the Defense Acquisition Program Administration’s (DAPA) decision to extend security penalty measures against the company by an additional year over allegations of military secret leakage. The company denounced the move as an arbitrary reversal of a major policy decision and vowed to pursue all available legal actions.

 

 

According to the defense industry on the 30th, the extension has sparked controversy as it comes at a highly sensitive moment, just before the bidding competition for the KRW 7.8 trillion Korean Next-Generation Destroyer (KDDX) project.



At a regular briefing, DAPA spokesperson Kim Joo-cheol explained that while the initial decision was to apply a three-year penalty until November 2024, further legal review led the agency to judge that multiple incidents should be treated separately. As a result, the penalty will now remain in place until December 2025, with a 1.8-point deduction applied through this November and 1.2 points thereafter.



The original case dates back to September 2020, when 12 HD HHI employees were implicated in a KDDX-related security incident. Nine were indicted, and final rulings were handed down between November 2022 and December 2023. DAPA’s prior position was to treat the matter as a single case, applying a penalty for three years from the first confirmed ruling in November 2022.



HD HHI criticized the sudden change, arguing that DAPA provided no new evidence, legal basis, or rational explanation for extending the penalty. The company also stressed it was not given an opportunity to present its position before the decision was announced.



An HD HHI spokesperson stated:

“At such a critical juncture, DAPA overturned a major decision without sufficient explanation. This undermines trust in a company that has long dedicated itself to national defense and damages the very foundation of Korea’s defense industry. We will take every possible legal measure to restore fairness.”



The controversy is further heightened by the fact that HD HHI, which has led the basic design phase of the KDDX program, argues that it should continue with the detailed design and lead ship construction, while rival Hanwha Ocean is pushing for open competitive bidding. With the penalty extension, HD HHI could face a significant disadvantage in the tender process.



The company added:

“This creates an uneven playing field that makes fair competition impossible. We strongly demand a reconsideration and will pursue every available legal remedy to protect both our rights and the national interest.”

 

 

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]