As the National Assembly audit approaches, tension is rising across various industries, including defense, shipbuilding, petrochemicals, and refining. Issues such as Hanwha Group's increased stake in Korea Aerospace Industries (KAI) and allegations of corruption in defense contracts, along with labor disputes and collusion, have emerged as key topics for the audit. With several CEOs being summoned as witnesses, there remains a possibility of additional witness selections right up to the audit date, keeping related companies on high alert.
According to industry and political sources on September 28, the National Assembly's Defense Committee has included Hanwha Aerospace Vice Chairman Kim Dong-kwan, KAI President Kim Jong-chul, and LIG Defense and Aerospace President Shin Ik-hyun in its list of general witnesses for the audit.
Vice Chairman Kim has been called to testify regarding Hanwha's increased stake in KAI and its management involvement, which has raised concerns about market competition and potential conflicts of interest. In August, Hanwha became the second-largest shareholder in KAI after acquiring additional shares. The audit is expected to address Hanwha's investment motives, KAI's independence, and the implications for competition in the defense sector.
Shin Ik-hyun's witness summons stems from allegations of bribery related to defense contract awards involving LIG D&A executives. Given the ongoing investigations and trials, the information that can be confirmed during the audit is expected to be limited.
Meanwhile, the heavy industry sector is also feeling the pressure. With numerous issues such as labor disputes, serious accidents, and collusion allegations piling up, the potential for additional witness selections remains a concern as the audit date approaches.
In the shipbuilding industry, labor conflicts over wages and collective agreements have persisted at HD Hyundai Heavy Industries and Hanwha Ocean, alongside rising issues regarding negotiations between primary and subcontractors. Notably, HD Hyundai Heavy Industries has reported five workplace fatalities this year, prompting calls for accountability regarding safety management from the company's leadership.
In the petrochemical sector, recent allegations of large-scale price collusion present a significant challenge. Prosecutors are investigating claims that seven companies, including LG Chem, Hanwha Solutions, and OCI, coordinated prices for eight petrochemical products, including PVC and caustic soda. As the investigation expands to include current and former executives, it is likely that issues of collusion and executive accountability will be scrutinized during the audit.
The refining industry is also under scrutiny due to price collusion allegations. CEOs from four major refining companies—SK Energy's Kim Jong-hwa, GS Caltex's Heo Se-hong, S-Oil's Ahn Jong-beom, and HD Hyundai Oilbank's Song Myung-jun—have been summoned as witnesses for the Industry, Trade, and Energy Committee audit, primarily concerning fuel price collusion. With fluctuations in international oil prices and domestic fuel costs, inquiries into the refining sector's pricing policies and roles are expected to be a focal point of this year's audit.
In contrast, the steel industry appears to be somewhat relieved. Although serious accidents and industrial safety issues have been recurring topics in past audits, it has been reported that the Industry Committee will not summon steel industry CEOs this year, likely due to a shift in focus toward significant issues such as artificial intelligence, data centers, and semiconductors.
* This article has been translated by AI.
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