KT Accused of Stealing Torder's Trade Secrets

During this process, the relationship between the two companies transformed from cooperation into conflict.

Specifically, Torder alleges that when internet line disruptions occurred at restaurants using Torder products, KT repair technicians would visit accompanied by Hiorder staff, KT's own tablet menu service, to persuade them to switch to Hiorder. Torder also claims that KT disparaged Torder products to its clients and imitated Torder's user experience (UX) and user interface (UI).

Torder stated that it has secured numerous clear pieces of evidence regarding KT's unfair business practices. Legal procedures are currently underway, and Torder plans to actively pursue legal action based on this evidence. This report was made to cover the ongoing conflict and legal dispute between the two parties.

In several meetings with KT's strategic investment team, Torder shared core information, including business plans, sales strategies, and technical structures. Torder requested a non-disclosure agreement (NDA), but KT delayed discussions, and eventually, the talks concluded without an NDA. This resulted in Torder's core confidential information being exposed to KT.

When KT approached Torder expressing interest in acquisition, opinions among Torder's investors were sharply divided regarding the sale. While some investors favored M&A, Torder CEO Kwon Sung-taek was skeptical about the merger and acquisition. However, due to pressure from the approving investors, CEO Kwon reluctantly decided to proceed with due diligence.

Due diligence is an essential process to accurately assess a company's value, requiring a look into its internal information. Torder's CEO Kwon Sung-taek requested an agreement on an approximate company valuation before due diligence, but with no agreement on the acquisition price, only Torder's core information was transferred to KT.

Torder requested a down payment (deposit) from KT to secure a safety net in case the deal fell through. However, KT's legal department stated that the down payment should not be high, leading to the cancellation of the down payment. During this process, KT executives, including a vice president, actively engaged with Torder, making promises and trying to build trust, but ultimately, due diligence proceeded without a down payment.

This caused further controversy given that a KT team leader had previously praised Torder's UI/UX before the acquisition negotiations. Torder has raised suspicions of design plagiarism.

Evidence emerged that KT dealership employees openly made disparaging remarks about Torder in sales situations. They reportedly mentioned the fact that KT attempted to acquire Torder but failed, then proceeded to conduct sales by undermining Torder's credibility, implying, "Why wouldn't they have done it?"

The relationship between KT and Torder involved similar problems in both attempts at cooperation. The first was the business cooperation process from late 2022 to early 2023, during which Torder's information was transferred to KT but no non-disclosure agreement was signed. After this cooperation, allegations of Hiorder's launch and internet line interference emerged. The second was the due diligence process for M&A, where information from Torder was again leaked to KT without a down payment, and after the deal collapsed, controversy over Hiorder's design plagiarism arose.

Once the investigation results are announced, Torder plans to pursue all possible legal procedures, including filing a report with the Fair Trade Commission. This is interpreted as a desire not just for personal redress but to improve unfair practices in the startup ecosystem.

Furthermore, it is understood that KT has maintained a no-response stance regarding Torder's efforts to raise the issue through media interviews and press conferences. However, it has been observed that KT is continuously monitoring news related to Torder.

Torder expressed concern that similar damages would recur unless the current system is changed. As a systemic alternative to prevent this, the idea of mandating down payments in M&A processes was raised. Additionally, given the limited number of M&A cases in Korea, it was argued that there is a strong need to actively consider introducing a government-managed escrow system to oversee transaction processes.

Torder CEO Kwon Sung-taek directly addressed suspicions that he was raising issues due to poor business performance, expressing his determination to overcome them. He stated that the time for anger has passed, and this lawsuit is not merely driven by personal feelings, but primarily for the public good, aiming to dismantle unfair practices in the startup ecosystem and urge institutional improvement. CEO Kwon expressed his hope that continued legal procedures and media exposure will bring this issue to public attention and lead to systemic change.