Cable maker apologizesLS Group, the nation’s largest cable maker, issued a public apology in major newspapers yesterday after its affiliate JS Cable supplied faulty cables to two under-construction nuclear power plants expected to be operational by next summer.
“LS Group will promise its best effort and cooperation of the normal operation of nuclear power plants and takes responsibility for the incident,” said the nation’s 16th-largest conglomerate.
The Nuclear Safety and Security Commission last week announced that control cables manufactured by JS Cable that were supplied to the Singori 3 and 4 nuclear reactors needed to be replaced because of poor quality.
JS Cable, in which LS Cable holds a nearly 70 percent stake, fabricated test certificates and supplied cables that had not passed a flame test.
Construction of the two reactors was to have been completed by next summer, but the bad cables expected to push the date back about a year. More than 900 kilometers (559 miles) of cables need be replaced.
Power shortages were feared last summer, and the government has been under fire for mismanagement of the nation’s power supply. The Ministry of Trade, Industry and Energy initially speculated that the threat of power shortages would ease following the construction of the Singori 3 and 4 nuclear reactors, but as that plan is scrapped, it is considering filing a lawsuit. Energy Minister Yoon Sang-jick already said the ministry intends to hold JS Cable responsible for corruption.
JS and LS Cable were among eight businesses fined by the Fair Trade Commission earlier this month for fixing prices of cables supplied to nuclear reactors.
Industry insiders said the Korea Nuclear and Hydro Power Corporation, which is a contractor of JS Cable, will likely file a lawsuit seeking compensation for estimated damages of more than 3 trillion won ($2.8 billion) for replacing cables, additional testing and construction delays. JS Cable reportedly received 36 billion won for supplying cables to the reactors.
JS Cable stock plunged 1.1 percent yesterday at the Seoul bourse, while LS Corp., the holding company of LS Group, dipped 3.11 percent to 74,700 won.
LS Group spun off from LG Group in 2003 as LG Cable Group after LG decided to set up a holding company to reorganize its ownership structure. It changed the name to LS in 2005 and has been the leading group in cable manufacturing and energy businesses. The founders of LS are the younger brothers of LG Group founder Koo In-hwoi.
BY JOO KYUNG-DON [email@example.com]
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