Prosecutors raid LG for vandalizing Samsung washer

By Jung Min-ho

Prosecutors raided the headquarters of LG Electronics, Friday, as part of an investigation into allegations that officials of the company deliberately damaged washing machines of rival Samsung Electronics at retail stores in Germany.

Samsung has accused Jo Seong-jin, president of LG’s home appliance division, and other LG executives of destroying some of Samsung’s premium washing machines at two stores ahead of the IFA electronics show in Berlin in September.

The Seoul Central District Prosecutors’ Office said it secured documents about the IFA and computer hard disks from the offices of seven executives including Jo at the company headquarters in central Seoul. Investigators are also examining their emails.

Prosecutors also raided LG Electronics’ home appliance factory in Changwon, South Gyeongsang Province.

“According to the security camera footage we obtained, Jo pressed down a Samsung washing machine on display,” a Samsung official claimed. “When it became a problem after police came to the store, Jo said he would buy it to cover it up.”

Samsung checked other stores in the city and found machines were also vandalized at Saturn Berlin Steglitz, allegedly by another LG official in the same way, he claimed.

LG denied the accusations, expressing concerns that the probe might hinder its proper operations and hurt its international reputation.

“We are concerned that the investigation, which began solely based on the rival firm’s baseless claims, would damage our reputation globally,” LG said in a statement.

All of the suspected LG officials showed up at the prosecution’s office for questioning except for Jo, who has refused to appear for questioning, saying he would appear after the Consumer Electronics Show (CES) held in Las Vegas in January.

The prosecution has imposed an overseas travel ban on Jo, according to sources at the office.

“As a person in charge of a 20 trillion won ($18 billion) business, Jo has been busy dealing with meetings and reviewing other tasks ahead of the CES. He planned to cooperate with the probe anytime after the event,” LG said.

Early this month, LG countersued Samsung for defamation, claiming that Samsung officials are the ones that damaged the washing machines to fabricate the evidence.

“In the video footage, there is a scene where a person, who seems like a Samsung employee, hits the washing machine many times,” the company said. “It is important to find out who actually damaged the washing machine and whether evidence was fabricated.”

LG added the washing machines were not damaged when its officials “simply checked” the products of rival companies.

The dispute is the latest between the two rivals, which compete across a wide range of products. Samsung aims to become the world's biggest home appliances manufacturer, while LG has the same goal.

They fought in 2012 over who had the bigger capacity refrigerator, the bigger market share for air conditioners and patent rights for display products.