A South Korean arms procurement agency may have forged documents in a $35mn worth deal in order to add equipments that don't meet the required standards, Yonhap reported on Friday.

The suspected deal was for a surveillance system along the country's seashore, which helps integrate existing radar and thermal imaging devices and can be used in all weather conditions.

It will help to thwart incursions by North Korean boats that sometimes try to covertly enter South Korean waters, the news agency reported quoting unnamed sources.

The arms procurement agency has been engaged in the project since 2013 and picked a company, identified only by its initial D, as a parts supplier and contractor.

Prosecutors said they suspect that the evaluation and verification process to designate the contractor has not been carried out in a thorough manner.

In a separate case, prosecutors have sought a formal detention warrant from a local court against a retired colonel, identified only by his surname Kim. He is suspected of forging documents and siphoning off munitions.

Several corrupt deals have been exposed over the last year since a special investigation team -- comprised of government, military and prosecution officials -- cracked down on corruption in the defense industry.

The government has opened a new department under the Seoul Central District Prosecutors' Office last month to cover corruption in the defense industry.