LG Uplus for the first time officially mentioned the possibility of negative business impact stemming from allegations that it concealed a hacking incident.
According to the Financial Supervisory Service's electronic disclosure system (DART) on the 21st, LG Uplus, in the "risks related to personal information leaks and network stability" item under the investment risk factors section of the securities registration statement submitted on the 16th, noted that it is under police investigation into whether there was intent behind the reinstallation and disposal of servers in connection with last year's hacking incident.
The company said, "Matters related to strengthening security against personal information leaks and the stability of the communications network can lead not only to investigations by the relevant authorities and the imposition of a penalty surcharge, but also to civil and criminal burdens such as compensation for affected customers depending on court decisions," adding, "They can also negatively affect the company's reputation and brand image and increase ancillary expenses related to personal information protection, ultimately having a negative impact on our revenue."
Previously, a public-private joint investigation team composed of the Ministry of Science and ICT and the Korea Internet & Security Agency (KISA) said that information connected to LG Uplus's integrated server access control solution (APPM)—server lists, server account information, and employee names—was confirmed by the investigation to have actually been leaked from LG Uplus, but that it was impossible to investigate because the operating systems (OS) of key servers had been reinstalled or discarded. In the end, the Ministry of Science and ICT was unable to continue the investigation and referred LG Uplus to the police on suspicion of obstructing the performance of official duties.
LG Uplus said, "This disclosure is a general risk notice to protect investors. The relevant authorities' investigation and probe are underway, and the company is cooperating faithfully with the police investigation."