Hoban Group, Parent Company of Daehan Electric Wire, Acquires LS Shares Ahead of 'Patent Lawsuit' Verdict

It has been confirmed that Hoban Group, the parent company of Daehan Electric Wire, has acquired shares of LS, the parent company of LS Cable & System.

According to the construction industry on the 12th, Hoban Group recently purchased less than 3% of LS shares. This was done ahead of the second trial ruling on the patent infringement lawsuit between LS Cable & System and Daehan Electric Wire, and some in the industry analyze that this share purchase is not unrelated to the lawsuit.

There is an interpretation that Hoban Group bought the shares held by the parent company of LS Cable & System to gain a favorable position in the legal dispute between its subsidiary Daehan Electric Wire and LS Cable & System.

LS, a KOSPI-listed company, owns 92.3% of its unlisted subsidiary LS Cable & System as of the third quarter of last year.

Hoban Group denied these suspicions, calling it a "simple investment." A Hoban Group official stated, "It is a minority stake of less than 3%, and we understand it as an investment looking at future growth potential."

▲Export submarine cables are being loaded at the LS Cable & System Donghae plant. (Provided by LS Cable & System)

In August 2019, LS Cable & System filed a lawsuit against Daehan Electric Wire, claiming that "the joint kit products for busducts manufactured and sold by the company (Daehan Electric Wire) infringed on its patent rights."

A busduct is a power distribution means that delivers electrical energy to buildings, and a joint kit is a component that connects individual busducts to maintain the flow of current.

The Seoul Central District Court, which handled the first trial, ruled partially in favor of LS Cable & System in September 2022, but both parties appealed, leading to a second trial. The industry is paying close attention to the appellate ruling to be issued on the 13th by the 24th Division of the Patent Court.

Meanwhile, separate from this lawsuit, a police investigation is currently underway regarding allegations that the underwater cable factory design know-how owned by LS Cable & System was leaked to Daehan Electric Wire through Gaun Comprehensive Architectural Office.

The police have criminally charged officials from Daehan Electric Wire and Gaun Comprehensive Architectural Office for violations including the Unfair Competition Prevention Act, and conducted a total of three raids on Daehan Electric Wire until November last year.

Previously, LS Cable & System developed ultra-high voltage underwater cables for the fourth time worldwide in 2007 and completed the first underwater cable-dedicated factory in Korea in 2009.

According to LS Cable & System, Gaun Comprehensive Architectural Office, which is suspected of technology leakage, was responsible for the architectural design of LS Cable & System's underwater cable factories (Buildings 1 to 4) from 2008 to 2023, and later took charge of constructing Daehan Electric Wire's Dangjin factory in Chungnam.