Home > Business > Industry

LIG Nex1 disqualified from Romania’s air defense bid over paperwork error

Published: 24 Dec. 2024, 12:09

LIG Nex1's booth at the Black Sea Defense & Aerospace exhibition held in Romania in May this year. [NEWS1]

LIG Nex1, a major Korean defense firm, has been eliminated from competing in Romania's defense project to acquire short-range air defense systems due to a paperwork error and has filed an appeal, according to industry sources Tuesday.

According to the sources, LIG Nex1 filed the appeal with the National Council for Solving Complaints, Romania's administrative body that resolves complaints about public procurement, also known as CNSC, on Dec. 16, after having been eliminated from the second-stage tender offer for the country's short-range air defense (Shorad) and very short-range air defense (Vshorad) systems earlier this month.

The elimination from bidding in the estimated 2 to 3 trillion won ($1.38 billion-$2.07 billion) project was due to a paperwork blunder involving the filing of a receipt for a 1 percent bidding initiation deposit worth reportedly around $4.2 million, the sources said.

LIG Nex1 has also argued it was subject to unequal treatment during bid meetings, claiming delegations from competitors were comprised of three to four people, whereas the Korean company was put at a disadvantage in terms of representation and assistance due to obliging to the set rules of having a maximum of two people per company at meetings.

According to LIG Nex1, MBDA and Diehl Defence were represented by delegations of four people. Rafael Advanced Defense Systems had three representatives.

"We were at a clear disadvantage compared to the other participants," LIG Nex1 claimed, adding it was able to have representatives who only spoke Korean and English, a copy of the LIG Nex1 appeal obtained by Yonhap News Agency showed.

The Romanian defense ministry has yet to respond to questions from Yonhap on the issue sent via email.

LIG Nex1 CEO Shin Ick-hyun explains proposes major goals for the local defense industry during an event held at LIG Nex1's Pangyo office in Gyeonggi in September. [LIG NEX1]

A LIG Nex1 spokesperson in Seoul confirmed the company's elimination from the bidding, explaining there were "differing opinions between parties regarding the submission of documents."

"The objection process established by the managing organization is currently underway," the company official added.

According to LIG Nex1, if the objection is accepted, they will regain eligibility to participate in the bidding.

Romania, a member state of the North Atlantic Treaty Organization, has maintained strong ties with South Korea's defense industry.

LIG Nex1 signed an agreement with Romarm, Romania's state-run defense company, in February 2023 to cooperate in the development and production of portable short-range antiaircraft missiles.

Hanwha Aerospace also struck a 1.38 trillion-won deal in July to supply weapons, including K-9 self-propelled howitzers, to Romania.

Yonhap