Security Deduction Extended by One Year, Originally Set to Expire in November
HD Hyundai Heavy Industries Strongly Protests Ahead of KDDX Project Contractor Selection
HD Hyundai Heavy Industries has announced plans to take legal action after the Defense Acquisition Program Administration decided to extend the penalty period for a military secrets leak by one year.
On September 30, HD Hyundai Heavy Industries stated, "The Defense Acquisition Program Administration has reversed a major policy decision without providing any sufficient explanation."
HD Hyundai Heavy Industries had been penalized with a 1.8-point security deduction after its employees were convicted of photographing and leaking military secrets, including concept designs related to the Korean-style Next-Generation Destroyer (KDDX) project.
At the time, nine employees were indicted; verdicts for eight of them were finalized in November 2022, while the final verdict for the remaining individual was confirmed in December 2023.
The Defense Acquisition Program Administration initially regarded both verdicts as stemming from the same case and planned to apply the security deduction for three years from November 2022 until November this year. However, following a legal review, the agency determined that the two verdicts should be treated separately and decided to apply the security deduction for each case independently.
As a result, the existing 1.8-point deduction will remain in effect until November this year, and a 1.2-point deduction will be applied from then until December next year.
This announcement from the Defense Acquisition Program Administration comes just before the decision on the 7.8 trillion won Korean-style Next-Generation Destroyer (KDDX) project method and is expected to have significant repercussions.
There had been speculation that HD Hyundai Heavy Industries could gain a competitive edge in the bidding process if the security deduction expired on November 19 this year. The company stated, "We have serious doubts about the background of this decision, especially as it comes at a critical time when the method for advancing the KDDX project is about to be determined."
HD Hyundai Heavy Industries added, "This constitutes a serious breach of trust against a company that has quietly devoted itself to the defense industry, a key pillar of national security," and emphasized, "We also make it clear that this is a grave act undermining the foundation of K-Defense and damaging the national interest."
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