Naval officers crowd Hanwha Ocean's exhibition pavilion during the International Maritime Defense Industry Exhibition (MADEX) 2023 at BEXCO in Busan in this June 2023 file photo. Yonhap

HD Hyundai Heavy Industries (HHI) said Tuesday that its employees filed a lawsuit last Friday against Hanwha Ocean's executives and employees for defamation by spreading false information.

The legal battle emerged as Hanwha Ocean conducted a series of press conferences in March, detailing its request for a police investigation into HD HHI executives for their alleged involvement in the theft of warship technologies by company employees between 2012 and 2015 from Daewoo Shipbuilding & Marine Engineering, which was renamed following Hanwha's acquisition last year.

Although the HD HHI employees involved in the technology theft were found guilty last November, the Defense Acquisition Program Administration (DAPA) allowed the shipbuilder to bid for the construction of destroyers for the Republic of Korea Navy, citing a lack of evidence indicating that the company's executives had instructed employees to steal data.

In response, the Hanwha subsidiary asserted that investigation records from the Ministry of National Defense demonstrate that HD HHI executives were indeed involved in the technology theft.

An in-house attorney of Hanwha Ocean speaks during a press conference at Hanwha Group's headquarters in Seoul, March 5. Yonhap

However, a group of HD HHI employees involved in the case refuted the claims, saying that the company executives had never been involved in any violation of the Military Secret Protection Act. They emphasized that the highest-ranking employee mentioned in the investigation records was not an executive at the time.

"This was verified during two and a half years of investigations by the Defense Counterintelligence Command and the Ulsan District Prosecutors' Office," the employees were quoted as saying by the company. "With the intention of slandering the complainants, Hanwha Ocean spread false information and defamed us through the news media."

HD HHI said the company itself will also take countermeasures against Hanwha Ocean's claims.

"Our employees are suffering mental pain due to Hanwha Ocean's unilateral disclosure of investigation records," an HD HHI official said.

Hanwha Ocean said the recent lawsuit highlights the alleged wrongdoing of HD HHI and its employees.

"We believed an HD HHI executive's involvement in the technology theft, considering its installment and operation of a server to store military secrets, and not just testimonies by its employees," a Hanwha Ocean official said. "We requested a police investigation in March as there had been no investigation into the management of HD HHI and the highest-ranking employee mentioned in the investigation records."

The company added that its accusations against HD HHI executives were intended to prevent the recurrence of similar illegal acts and to ensure justice and fairness in the defense industry.

During the press conference held in March, the shipbuilder denied speculation that its accusations against HD HHI executives were aimed at monopolizing the domestic warship market. Additionally, it clarified that it was not contesting DAPA's decision.

At that time, however, HD HHI dismissed Hanwha Ocean's claim as baseless, emphasizing that the court and the arms procurement agency had already reached conclusions on this matter.