Prosecutors in South Korea have indicted nine people for allegedly leaking Samsung's flexible display technology to a Chinese company.
Plot To Sell Samsung Intellectual Property To Chinese Company
The Suwon District Prosecutors' Office filed charges against the CEO of Samsung supplier Toptec Co Ltd and eight of the company's employees. Toptec sells automated equipment used to make display panels for phones.
The accused were charged for selling information about Samsung's OLED panels earlier this year. Samsung uses its curved-edged OLED display tech in its flagship Galaxy phones.
Prosecutors said that the group transferred "3D lamination" technology and other equipment to an unidentified Chinese screen maker in exchange for about $13.8 million.
They said that the supplier sold the technology after its sales dipped, violating its non-disclosure agreement (NDA) with Samsung.
The group also reportedly went to the extent of forming a fake company and building the equipment at another factory to cover up the alleged plot.
South Korean authorities, however, caught the equipment being loaded up on a ship headed to China.
Toptec, whose shares tumbled by 20 percent following the news, denied committing any wrongdoing.
"Our company has never provided Samsung Display's industrial technology or business secrets to a Chinese client. Our company will fully cooperate with legal proceedings to find the truth in court," Toptec said in a statement.
National Core Technology
Prosecutors said that it took Samsung six years, 38 engineers and the equivalent of $134 million to develop the leaked intellectual property, which South Korea considers as a national core technology. Trade secrets such as those of Samsung's are sought after as they could help businesses obtain economic advantage over their rivals
News of the leak comes as South Korea tries to maintain its technology lead over China, which now aims to boost its role as a manufacturer and not just an assembler of technological goods.
China is now spending billions to become self-sustaining in areas such as displays and memory chips, where Samsung is currently the world leader.