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2 arrested for leaking Hyundai car designs to China

July 17, 2015

(AP Photo/Ahn Young-joon)

By Jung Min-ho

Two people have been detained for allegedly leaking car designs of Hyundai Motor Group to a Chinese automobile manufacturer, police said Friday.

According to the Seoul Metropolitan Police Agency, a former employee of a Hyundai subcontractor, identified only by his surname Kim, is suspected of having stolen Hyundai’s business secrets, including designs of its new models from March to September of last year. It is alleged that he later gave the information to a car design company that works with the Chinese firm.

The head of a Korean subcontractor for the Korean design firm, surnamed Kwak, is also under suspicion for sharing Hyundai’s business secrets with Kim and others, police said.

Twenty others have been booked with detention for helping them.

It is unclear whether they committed the alleged crimes in exchange for financial reward or to gain a position with the Chinese company. During interrogation, the suspects denied the allegations, police noted.

The police said they had not found clear evidence that the Chinese firm used the stolen designs for developing its own new models.

A Hyundai official said the financial loss from the theft could amount to 70 billion won ($61 million).

“Our investigation is ongoing. We believe there are more cases,” a police officer said. “Such crimes not only damage the finances of private companies but also the nation.”

For years, Chinese automobile manufacturers have been accused of stealing information from its competitors under the protection of Beijing’s loose intellectual property laws.

In 2013, a former General Motors engineer was found guilty in the United States of stealing secrets related to the automaker’s hybrid technology with the intention of using the information to develop similar vehicles in China.