Hanwha Data Deletion Allegations Prompt FTC Probe

Headquarters of Hanwha Group. (Photo courtesy of Hanwha) Allegations have been raised that an email directing the deletion of specific data was sent to some Hanwha Group employees ahead of an on-site investigation by the Fair Trade Commission. As the words mentioned for deletion aligned with the contents of the investigation, the possibility that internal Fair Trade Commission information was leaked in advance has also been raised. In response, Fair Trade Commission Chairman Joo Byung-ki stated his position that a thorough inspection is necessary. Chairman Joo responded to an inquiry regarding the necessity of an inspection into the alleged leak of internal Fair Trade Commission information during the comprehensive parliamentary inspection by the National Policy Committee of the National Assembly on Oct. 21, stating, “It must be thoroughly inspected.” When Representative Kim Hyung-yeon of the Rebuilding Korea Party asked whether the facts of the related reports had been verified, he said, “I have checked all the reported contents.” Regarding whether the internal leaker had been identified, he explained, “That part is under review, and we are also processing the act of interfering with the investigation.” Previously, reports emerged that an email directing the deletion of specific data was sent to some Hanwha employees five days before the Fair Trade Commission investigated allegations of Hanwha Group’s trademark usage fees and unfair support for affiliates in June. The email reportedly contained instructions to delete data including words such as ‘unfair support’, ‘chairman’, ‘DK’ referring to Hanwha Group Vice Chairman Kim Dong-kwan, and ‘collusion’. The Fair Trade Commission conducted an on-site investigation in June to verify the appropriateness of the trademark usage fees paid by Hanwha Group affiliates to Hanwha Corporation. It is examining whether the usage fees were excessively increased and whether there was coercion or unfair intervention in the transaction process. During the parliamentary inspection on this day, when Representative Han Chang-min of the Social Democratic Party pointed out that the appropriateness of trademark usage fee increases by large conglomerates should be examined, Chairman Joo said, “It is difficult to give detailed remarks right now as the investigation is ongoing, but we are thoroughly investigating.” He then emphasized, “There is a need to create basic guidelines or principles for profit distribution related to trademark rights.” Hanwha maintains the position that the data deletion instruction is unrelated to the Fair Trade Commission investigation. It rebutted that there was no instance of grasping the on-site investigation plan in advance or preparing for it, and that the email in question was sent in accordance with standard information security policies. To date, the Fair Trade Commission has not announced that it has confirmed an internal information leak or acts of investigation interference by Hanwha. Meanwhile, during the parliamentary inspection on this day, allegations were also raised regarding Hanwha Engine’s poaching of STX Engine personnel and misappropriation of technology. In response to a related inquiry by Representative Kim Hyun-jung of the Democratic Party of Korea, Chairman Joo stated, “I will ensure we thoroughly verify whether there was any interference with business activities through the misappropriation of technology caused by the outflow of personnel.”