The state arms procurement agency on Tuesday cleared major shipbuilder HD Hyundai Heavy Industries Co. to bid in government contracts after deliberating on its possible restriction over the company's involvement in a military secret leak.

Last November, employees at HD Hyundai Heavy Industries were found guilty of violating the Military Secret Protection Act by acquiring military secrets related to the Korea Destroyer Next Generation (KDDX) project and sharing them on their company server from 2012 to 2015.

The case prompted the Defense Acquisition Program Administration (DAPA) to convene its contract review committee on Tuesday to decide whether to punish the company by restricting it from bidding in government contracts for a certain period of time.

DAPA said the committee decided against the punishment and only to take administrative guidance measures as the case had passed the statute of repose, and that it could not determine whether the company's CEO or executives were directly involved in the incident.

An official at HD Hyundai Heavy said the company respected DAPA's decision and that it would make efforts to contribute to the growth of the country's defense industry.

The decision marks a win for HD Hyundai Heavy, which already faces point deductions in its tender evaluations by DAPA due to the leak. If it had been penalized by the committee, the company could have been restricted in competing in Navy projects.

The move comes as DAPA is expected to invite bids to build the first KDDX vessel this year as part of the country's 7.8-trillion won (US$5.86 billion) project to develop and build six 6,500-ton Aegis combat system-equipped destroyers by 2030. (Yonhap)