Continuing Rough and Tumble
The prosecution has reportedly imposed bans on international travel for Cho Seong-jin, CEO of the Home Appliance Unit of LG Electronics, and will request an arrest warrant soon.
He is being accused of vandalizing the washing machines of Samsung Electronics just prior to the IFA 2014, the largest consumer and home appliance exhibition in Europe, which was held in Germany in September.
Samsung Electronics accused LG Electronics President Cho Sung-jin and some other employees in September of general affairs disturbance, spoliation of property, and defamation of character. Samsung claimed that CCTV cameras recorded those people intentionally damaging the door hinges of a Samsung Electronics Crystal Blue washer. The company presented CCTV footage to the prosecutors’ office showing Cho hitting the doors of the washing machines as evidence of the incident.
However, LG release an official statement saying that there was no deliberate intent to vandalize the machines. Instead, the statement says that its executives had been testing its rivals’ goods. The company also reimbursed Samsung for the damaged appliances.
Also, LG has said until recently that the company was scheduling Cho’s questioning with the prosecutors. However, as the prosecutors have recently forbidden Cho from leaving the country, it seems to be inevitable for the company to dodge criticism by Cho, having avoided the investigation on purpose.
The “washer destruction” disputes eventually lead to a severe reaction between Samsung Electronics and LG Electronics.
LG Electronics stated on Dec. 21 that they formally accused employees of Samsung Electronics on charges of forgery of evidence and defamation of character via the Seoul District Public Prosecutor’s Office on Dec. 12. The company responded to the question regarding the reason of the accusation by saying, “The video footage released by Samsung Electronics to the public media shows a person, who is assumed to be an employee of Samsung Electronics, inflicting physical harm on a washer multiple times, which could constitute spoiling the evidence of a criminal case.” Based on such claims, LG Electronics also brought charges of defamation of character and concealment of evidence.
The company emphasized the fact that Samsung Electronics' German branch accused LG Electronics’ officer in charge of washer development but received a non-indictment measure by the local prosecution.
Samsung Electronics refuted the argument by claiming that LG Electronics is blurring the true nature of the incident by turning the dispute into a cross action lawsuit between the opposing companies. An official from Samsung Electronics said, “The actions of LG Electronics pressing charges on its opposing party with their own president, Cho Sung-jin, undergoing a prosecution investigation including being banned to foreign travel is beyond understanding.”
Meanwhile, LG Electronics had divided its white goods into two business units: Home Appliances (HA) and Air Conditioning & Energy Solutions (AE). However, through a recent reorganization of the company, it has merged these units to create a consolidated LG Home Appliance & Air Solution (H&A) Unit, and Cho was appointed as the head of the newly-created business unit.