By Jung Sung-ki
Staff Reporter
The chief executive officer (CEO) of a local defense firm was arrested last week on charges of tax evasion and suspected of corruption, the prosecution said Thursday.
Eugene Kim, chairman and CEO of Huneed Technologies, was charged on Feb.11 over allegations of tax evasion, it said.
Investigators from the Suwon District Public Prosecutors' Office had already raided Huneed's offices in Seoul and Gunpo, Gyeonggi Province, last month during a probe into former and incumbent staff over their alleged embezzlement of billions of won.
A source told The Korea Times that Huneed, a communications equipment developer, is also suspected of having posted false stock prices, created slush funds and leaked military secrets to foreign defense firms.
A senior executive from Boeing Korea's headquarters in Seoul was summoned Wednesday for questioning about the U.S. aerospace company's possible corrupt connections with Huneed, the source said.
Boeing made an equity investment of $20 million into Huneed in 2006 in a bid to enter South Korea's command, control, communications and networks (C3N) market. It has a 16.4 percent stake in the Korean company and is the second-largest shareholder.
Both firms plan to open a modeling and simulation (M&S) laboratory at the Songdo Special Economic Zone, west of Seoul, later this year.
The laboratory, the first of its kind to be established by Boeing in Asia, is designed to test a wide variety of military and commercial platforms and programs through M&S experimentation, visualization and evaluation.
"The prosecution is currently investigating Chairman Kim on charges of tax evasion, but there is a possibility that the probe will be widened to other charges as investigators are closely looking at Huneed's possible leakage of classified military information to foreign defense companies," the source said, asking not to be named.
Huneed representatives denied the allegations, saying 2009 audits by the Board of Audit and Inspection and the Defense Security Command concluded that their firm had not been involved in any irregularities, including the leakage of military secrets.
"The investigation is still underway, and nothing has been confirmed," they said.
The authorities, however, have secured circumstantial evidence that Huneed may have leaked military secrets as it pushed to win deals with foreign defense firms, according to the source.
For example, he said an Air Force brigadier general, identified only by his surname Kang, accompanied Kim when the chairman travelled to Israel last year for talks with the firm's business counterparts there.
It is against the law for an incumbent military officer to accompany a defense contractor on a business trip. The general was a key commander of the ROK Air Force's Operations Command in Osan, about 64 kilometers south of Seoul, before retiring July 31 last year. The general subsequently joined Huneed as an executive director.
Huneed has reportedly sought partnerships with Israeli defense firms to win key arms acquisition programs in South Korea.
In an effort to challenge Lockheed Martin's stealthy F-35 Lightening II aircraft for the forthcoming third phase F-X fighter acquisition bidding, Boeing and Huneed are considering integrating Israel-based Elbit's three-dimensional sensor fusion/data display system into the F-15 Silent Eagle fighter.
The Huneed-Boeing team is also competing for a 300-billion-won deal to build an air and missile defense-cell (AMD-Cell) aimed at monitoring, tracking and intercepting missiles from North Korea. The cell, which will be operational by 2012, will be interoperable with Israel's Green Pine ballistic early warning radar system that was chosen by the Defense Acquisition Program Administration last year.
The Korea Times
