Established Research Lab in Domestic University
A well-known Chinese automotive manufacturer is currently under investigation by South Korean law enforcement agencies for allegedly establishing a subsidiary in South Korea and illicitly acquiring domestic battery technologies from Samsung SDI and SK on, formerly SK innovation.
According to industry and legal sources on Jan. 16, the National Security Investigation Bureau of the Korean National Police Agency recently transferred five former and current employees of Samsung SDI and SK on, including a Mr. A, along with three corporations -- Svolt Energy Technology Korea, Svolt Energy Technology China, and the parent company Great Wall Motor Corporation -- to the Seoul Central District Prosecutors’ Office on charges of violating the Industrial Technology Protection Act.
The Svolt China headquarters is accused of establishing its domestic branch, Svolt Korea, and setting up a research facility cum office in the Korea University Industry-Academia Cooperation Foundation building in the Seongbuk district of Seoul in June 2020. The company is under suspicion of leaking key national technologies related to Samsung SDI and SK on batteries used in major electric vehicles. The police believe that Svolt’s parent company, Great Wall Motor, orchestrated organized instructions for technology theft and so the police have consequently referred the case to the prosecution.
Great Wall Motor is China’s largest sport utility vehicle (SUV) seller, while Svolt ranks fourth in electric vehicle battery market share within China. Recently, Great Wall Motor announced collaboration with the U.S. autonomous driving platform company, NVIDIA, during the world’s largest consumer electronics and information technology trade show, CES.
Before and after the establishment of Svolt Korea the company participated in various associations within the battery industry and approached key researchers, including Mr. A, from leading domestic companies involved in the development of “K-Battery” technologies. It enticed individuals like Mr. A by offering them positions at Svolt Korea, assuring them that they would not have to work from the China headquarters office since there is an office in Korea. The company promised a minimum doubling of their salary at the time and significant bonuses.
Svolt Korea emphasized the benefits of “domestic work,” distinguishing itself from previous instances of technology leaks originating from China. In contrast to cases where employees were required to work in the China headquarters office or frequently sent on business trips, this marks the first time investigative authorities have identified such tactics.
Mr. A, who has now been referred to the prosecution, ascended to an executive position at Samsung SDI in 2009, where he was responsible for the core technology research and development of battery cells. Those implicated in the technology leak, including Mr. A, captured images of electric car blueprints and battery cell diagrams using their smartphones during their tenure at the company in 2018. After joining Svolt Korea, they provided the images to Svolt. Thanks to their research and work experience, the process of technology leakage reportedly went smoothly.
Svolt has denied all allegations during the police investigation, and the individuals, including Mr. A, have reportedly explained the job transition as a mere coincidence.