Police Raid Intensifies LS-Daehan Electric Wire Dispute: "Technology Theft" vs "Excessive Control"

The dispute over 'technology leakage' allegations between LS Cable & System and Daehan Cable, the top two players in the domestic cable industry, is intensifying again following a police raid.

DaeHan Electric Wire Dangjin Factory. Photo by DaeHan Electric Wire

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According to the industry on the 16th, the Industrial Technology Security Investigation Unit of the Gyeonggi Southern Provincial Police Agency recently turned Daehan Cable into a suspect for violating the 'Act on the Prevention of Unfair Competition and Protection of Trade Secrets' (Unfair Competition Prevention Act) and conducted a raid on its headquarters. The police plan to investigate whether LS Cable & System's submarine cable technology was actually leaked to Daehan Cable based on the internal documents they secured.

In response, LS Cable & System issued an official statement the day before, saying, "If it is proven that Daehan Cable stole our technology, we will take all legal measures domestically and internationally." They added, "Daehan Cable contacted the architectural firm first to request several designs, and the contract amount is said to be more than twice that of LS Cable & System," and "We heard that they also approached other LS Cable & System partners for the production and layout of the same equipment."

Regarding this, Daehan Cable stated in an explanatory document, "We have refrained from making specific statements about the ongoing investigation, but we want to clarify the facts regarding LS Cable & System's unverified speculation-based statement."

Daehan Cable explained that they neither stole nor utilized LS Cable & System's trade secrets and that Gaun Architecture was a fairly selected company. "It is not true that Daehan Cable contacted Gaun Architecture first to request several designs, and we do not know the contract amount of the competitor," they said. "Gaun Architecture is a company that designs factory spaces, and we produced and installed submarine cable equipment through specialized companies."

Daehan Cable also urged LS Cable & System to stop excessive checks aimed at blocking their entry into the submarine cable market. "If LS Cable & System, which holds a monopoly position domestically, obstructs our market entry with unverified claims, it will not only weaken the national competitiveness of the submarine cable and offshore wind power industries but also fail to protect our cable market from overseas companies such as those from China," they said.

They added, "We will promptly conclude the current situation and proceed with the submarine cable business and investments as planned," and "We request competing companies to refrain from excessive public opinion campaigns, and if it is proven that there are no charges, we will take all possible civil and criminal actions."

Meanwhile, this allegation was triggered when Gaun Architecture, which had been responsible for the architectural design of LS Cable & System's HVDC factory from 2008 to 2023, participated in the construction of Daehan Cable's first submarine cable factory, a competitor of LS Cable & System. This factory was built in the Godeok District of Asan National Industrial Complex, Dangjin City, Chungnam Province, and started operation on the 3rd. The police suspect that the architectural firm leaked submarine cable-related technologies obtained while designing LS Cable & System's factory during the process of designing Daehan Cable's factory.

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