South Korea’s arms procurement agency recently suspended its project to replace the K1A assault rifle for special forces after it found the defense firm contracted for the job had unauthorized access beforehand to the type of weapons the agency was planning to develop. 

The K1A uses rifle ammunition but is classified as a submachine gun by the military.

“Nothing, really, has been decided on what to do with the project yet … we’ll have to see how the trial unfolds,” a senior military official said Tuesday, noting whether to pursue a new joint venture with a different local firm or to scrap the project altogether remains under review.

The president of Dasan Machineries, the firm accused of using secret military information, is standing trial; so is a former Army officer who was allegedly compensated for slipping the secret to him. The officer joined the company after he retired from service.

In July last year, the military opened an investigation into the firm and uncovered classified information involving the weapon project. The military suspects the Army officer delivered the documents -- retrieved over the last five years dating to 2015 -- to Dasan’s CEO. The trial recently began.

The arms procurement agency said the firm will face punitive action, pending approval from its committee comprising military experts and outside civilian advisers. The company will likely be prevented from taking part in agency projects to come, though the duration is still being debated, according to the agency.

But Dasan will not see its license to manufacture military equipment revoked by the agency. The agency can revoke permits if defense firms producing key military items are found guilty of wrongdoing. Dasan’s assault rifle is not one of them.