A former chief of Korea Aerospace Industries Co. (KAI) at the center of a corruption scandal in the sole South Korean aircraft manufacturer has been detained on charges of accounting fraud and negligence, prosecutors said Wednesday.
The Seoul Central District Prosecutors' Office put Ha Seong-yong, former CEO of KAI, under urgent detention earlier, saying it was necessary given the gravity of the allegations raised against him.
The prosecution has 48 hours before it decides whether to seek an arrest warrant from a court.
Ha had been questioned by the prosecution for hours since Tuesday over allegations that he was either involved in or knew about an array of irregularities at KAI, ranging from manipulation in accounting and supply deals to backdoor hiring and running slush funds.
He has apparently denied any wrongdoing.
Prosecutors have been investigating KAI on allegations that officials gained illicit profits by manipulating expenses in the manufacturing of the utility helicopters known as the Surion.
They are also suspected of inflating the value of the proceeds from the sale of a light attack aircraft, the FA-50, to Iraq, in a deal worth some 3 trillion won (US$2.6 billion).
They said earlier they have secured evidence that suggests Ha was regularly briefed on the situations. Ha stepped down soon after the investigation began in July.
The fraud allegations were first raised in 2015, when the state auditor's inspection found that KAI pocketed some 24 billion won in illicit profits by manipulating development costs in the Surion project.
