LIG Defense & Aerospace (LIG D&A) will take legal action, including filing an application for a stay of execution and a lawsuit seeking cancellation of the administrative disposition, in response to the two-year bid participation qualification restriction imposed by the Defense Acquisition Program Administration.
On the 22nd, LIG D&A disclosed that its eligibility to participate in bids against the government, local governments, and public institutional investors would be restricted for the next two years. The restriction period begins on the 29th of this month, when the disposition takes effect. Last year, LIG D&A’s revenue related to government and public institutional investors was 277.73 billion won, accounting for 64.5% of total revenue. As a result, it is predicted that if the sanction is actually enforced, it could affect the company’s medium- to long-term revenue base.
However, the 277.73 billion won will not be immediately deducted from revenue at the same time as the bid restriction takes effect. Development and Yangsan projects for which contracts have already been signed and are in progress can continue to be carried out. LIG D&A explained, "If a stay of execution is granted regarding the administrative disposition, there will be no impact on bid participation eligibility until a judgment is rendered in the lawsuit seeking cancellation of the administrative disposition."
The company has decided to immediately take legal action. LIG D&A stated, "We regret that an administrative sanction was issued based on prosecution while legal proceedings are underway," and added, "We plan to earnestly explain the company’s position so as not to hinder business operations."
On the 20th of last month, the Defense Acquisition Program Administration held a meeting of the Defense Procurement Contract Review Committee and resolved to impose a two-year bid participation qualification restriction on LIG D&A—the highest level under the National Contracts Act—citing reasons such as offering bribes.
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