hankyoreh

Fourteen executives from seven South Korean defense firms have been indicted by prosecutors for illegally selling factory equipment and technology to the government of Myanmar. The materials were to be used for the construction of a munitions plant.

The Seoul District Prosecutor's Office indicted officials at Daewoo International, Doosan Infracore, and five other companies on Wednesday. It also issued an arrest warrant for Yang Jae-sin, former president of Daewoo Machinery, now known as Doosan Infracore. Yang is believed to be in the United States.

"The Korean government prohibits the exportation of arms equipment and technology to Myanmar," said prosecutor Lee Geon-ju. "This is the first time we have exposed a case in which individuals exported an entire arms plant project, including factory materials, equipment, and technology."

In May 2002, Daewoo International signed a US$133.38 million contract with Myanmar arms industry officials to participate in the construction of a factory and the transfer of technology that would allow the Southeast Asian country to produce tens of thousands of six varieties of cannon shells a year. As of October 2005, Daewoo had exported close to 480 pieces of equipment and parts to Myanmar. The company was also found to have been training Myanmar citizens by having some of them come to Korea and by sending Korean technical experts to Myanmar for on-site training.

The other companies under investigation were subcontracted by Daewoo to help provide the technology sent to Myanmar.

According to Prosecutor Lee, 90 percent of the factory has been completed and the Korean companies have received 90 percent of their payment.

"The contract was written to look like these companies were exporting regular machinery," said Lee. "These companies used code words like 'owner's hose' for the Myanmar defense ministry and 'rice container' for factory." He noted that money was transferred into personal bank accounts instead of corporate accounts, and that the plans for the cannon ammunitions plant appear to have been stolen by a 55-year-old individual who worked at the Korean defense ministry's Agency for Defense Development, which is how investigators think the information for the operation was passed to Myanmar.

An official at Daewoo International told reporters that "no one knows how ammunitions production equipment got exported."

The prosecution presumes that the deal was likely struck at the request of Myanmar's government, with which Daewoo had contact through other technology and natural resources ventures.

According to prosecutors, the National Intelligence Service learned of a leak in ammunitions manufacturing technology last August and began investigating with the cooperation of the Defense Security Command.

Please direct questions or comments to [englishhani@hani.co.kr]