South Korean prosecutors said last week they have arrested a former LG Electronics employee on charges of illegally providing plasma display technology to a Chinese company.
LG Electronics, the world's third-largest seller of plasma televisions and panels, said the suspected industrial espionage could cost it $1,4-billion in lost sales.
State prosecutors claim the employee, identified only by his surname Jung, gave the technology to COC, a company based in the Chinese province of Sichuan.
The prosecutors say Jung, who was arrested last month, took a portable computer hard drive that contained designs and other information about an LG plasma display panel factory before quitting the company in 2005.
Jung later joined COC in February 2007 as a technology adviser and is accused of sharing the proprietary information with his new company, the prosecutor said.
Also indicted was another former LG employee and a current employee, who both allegedly helped Jung after he joined the Chinese company, he said.
If convicted of violating South Korea's fair competition and sales secrecy laws the three face up to seven years in prison each. Jung remains in custody in South Korea.
South Korea's Yonhap news agency reported that the Chinese company offered Jung $300 000 (about R2,3-million) a year, a flat and a car.
COC, a venture involving Sichuan Changhong Electric, China's biggest television maker, and South Korean plasma display maker Orion PDP, refused to comment "until we clarify the situation".
Analysts say Chinese companies have been trying to catch up with South Korean and Japanese rivals in the plasma display industry by hiring South Korean talent. - Sapa-AP