Hanwha ramps up criticism of HD Hyundai over tech theft
Hanwha Ocean held a press conference on Tuesday to explain the details behind its request a day earlier for a police investigation into executives of HD Hyundai Heavy Industries (HHI) for their alleged involvement in the theft of naval ship technologies between 2012 and 2015 from Daewoo Shipbuilding & Marine Engineering, which was renamed after Hanwha Group’s acquisition last year.
The event was held about a week after the Defense Acquisition Program Administration (DAPA) decided not to exclude HD Hyundai’s shipbuilding unit from bidding for the construction of destroyers for the Republic of Korea Navy, citing a lack of evidence that the company’s executives had ordered its employees to steal data.
During the press conference, the shipbuilding unit of Hanwha Group presented various documents from courts and prosecutors as evidence that HD HHI’s management may have ordered or been aware of the tech theft by its employees, who were found guilty in 2023.
Hanwha Ocean said it did not have a chance to provide those documents to the state arms procurement agency before it made the decision last week.
Given that it is unusual for a Korean company to hold a press conference to denounce its competitor, Hanwha Ocean’s move was widely interpreted as an attempt to overcome HD HHI in their fierce rivalry in the naval ship market.
However, the Hanwha subsidiary denied speculation that its accusation against HD HHI executives was intended for its own interests, adding that it is not arguing that DAPA’s decision was wrong.
“We decided to hold this press conference to prevent the recurrence of similar illegal acts and to guarantee justice and fairness in the defense industry,” an in-house counsel of Hanwha Ocean said. “No country will want to buy weapons from a country that frequently experiences the leakage of military secrets.”
Although it is expected to take time to finish investigating the HD HHI executives, Hanwha Ocean did not rule out the possibility that DAPA could review the issue once again and ban HD HHI from taking government contracts.
In addition, Hanwha Ocean refuted claims that it may monopolize the domestic warship market if HD HHI is barred from government contracts for several years due to sanctions.
“Korea has multiple naval ship manufacturers such as SK Oceanplant and HJ Shipbuilding & Construction,” the in-house counsel said.
Hanwha Ocean also said it will compete with HD HHI if DAPA upholds its previous decision.
In response, HD HHI described Hanwha Ocean’s claim as nonsense, emphasizing that the court and the arms procurement agency had already made conclusions on this issue.
“We will focus on enhancing the competitiveness of the Korean defense industry by upgrading technologies and increasing exports,” HD HHI said.