HD Hyundai Heavy Industries Recruits Government Insider... Why? [Yang Nak-gyu's Defence Club]

Recruitment of the First National Security Office Director of the Current Government as Outside Director
Even Army Generals Unrelated to the Shipbuilding Business Are Recruited

HD Hyundai Heavy Industries is actively recruiting key figures from the current government. There are speculations that this move is being used as a means to avoid various government sanctions after being caught stealing military secrets related to the next-generation destroyer (KDDX).

[Image source=Yonhap News]

According to industry sources on the 23rd, Kim Seong-han, former National Security Office chief under the Yoon Seok-yeol administration, recently applied to become an outside director of HD Korea Shipbuilding & Offshore Engineering (formerly Hyundai Heavy Industries). HD Korea Shipbuilding & Offshore Engineering is the intermediate holding company of HD Hyundai Heavy Industries.

Kim, a childhood classmate of President Yoon, graduated from Seoul National University High School and Korea University with a degree in English Language and Literature. He earned a master's degree in political science and diplomacy from Korea University Graduate School and a Ph.D. in political science from the University of Texas at Austin. He has no connection to the shipbuilding and marine business.

Some speculate that his tenure about 10 years ago as a board member of the Asan Institute for Policy Studies, a research institute specializing in diplomacy and security, and his classification as an associate of Chung Mong-joon, chairman of the Asan Social Welfare Foundation, played a significant role. Chung is currently the largest shareholder of HD Hyundai, holding a 26.6% stake at the top of the corporate governance structure of Korea Shipbuilding & Offshore Engineering. HD Korea Shipbuilding & Offshore Engineering plans to propose the appointment of outside directors at the shareholders' meeting scheduled for March.

Within the industry, questions are being raised as to whether HD Hyundai Heavy Industries is attempting to influence the sanctions review related to the theft of military secrets and the disqualification of corrupt contractors. The Defense Acquisition Program Administration is scheduled to hold a review on the 27th. If sanctioned, HD Hyundai Heavy Industries will be barred from participating in bids for the time being.

Another notable recruit is retired Army Lieutenant General Kim Jong-bae, appointed as vice president (special advisor) of the Special Ship Division at HD Hyundai Heavy Industries. This is the first time since the company's founding that an Army lieutenant general has been recruited by HD Hyundai Heavy Industries, which builds naval vessels such as surface ships and submarines. Vice President Kim is a graduate of the 36th class of the Korea Military Academy. His final post was Commander of the Army Training Command. His classmates include National Assembly member Kim Seong-hoe, Lieutenant General Kim Hyun-jip of the ROK-US Combined Forces Command, and General Jang Jun-gyu, former Chief of Staff of the Army. He also has ties with former National Security Office chief Kim Kwan-jin, who served as vice chairman of the Defense Innovation Committee directly under the current president. Kim Kwan-jin served as his direct company commander when Kim Jong-bae was a battalion commander.

Some view the recruitment of Vice President Kim as part of an integrated defense strategy across the army, navy, and air force, anticipating rapid growth in the naval vessel market. However, Kim is known as an "operations expert," having held key positions such as Joint Operations Officer and Director of Operations at the Joint Chiefs of Staff, which makes his background somewhat inconsistent with business related to military power. Last year, retired Navy Rear Admiral Cheon Jeong-su also joined the company. A graduate of the 40th class of the Korea Naval Academy, his final post was Commander of Cyber Operations Command. He currently serves as a full-time advisor at the Special Ship Division.

An industry insider said, "Recruiting high-ranking officials who served in the current government can be beneficial for overall corporate management," but added, "However, caution should be exercised when recruiting talent who could exert improper influence."