Photo/Illutration This photo shows Taiwan's domestically-made submarine during the naming and launching ceremony of domestically-made submarines at CSBC Corp.'s shipyards in Kaohsiung, southern Taiwan, on Sept. 28. (AP Photo)

A South Korean court found two contractors that worked on Taiwan’s submarine program guilty of leaking designs for torpedo-launching systems, calling the case a potential “diplomatic burden” for Seoul, according to a ruling reviewed by Reuters.

On Tuesday, the Masan Branch of the Changwon District Court sentenced the chief executive of one South Korean contractor to two and a half years in jail and handed down jail terms of one and a half years to two employees of another firm, according to the ruling.

The ruling did not name the defendants and the companies involved, but it did name their lawyers, who declined to comment.

The defendants, who were hired to build torpedo-launching tubes and storage for Taiwan’s submarine project, were accused of leaking highly classified information on designs to Taiwan, the ruling said.

The court said the case risked becoming a “major diplomatic burden” for South Korea.

“This crime is a matter that could pose a significant threat to South Korea’s security, as strategic technology was exported without the approval of the Defense Acquisition Program Administration (DAPA), and the export partner is Taiwan, which has a tense relationship with neighbours in East Asia,” the ruling said.

DAPA is South Korea’s national arms-sales regulator.

South Korea, like most countries, only has formal diplomatic ties with Beijing, not Taipei. China views the island as its own territory, a position Taipei’s government rejects.

The defendants denied wrongdoing and argued that the information they shared with Taiwan did not involve business secrets or sensitive technology requiring export permits, the ruling said.

Taiwan’s defense ministry referred questions on the case to CSBC, the Taiwanese shipbuilder that is leading the construction of the submarines. CSBC did not immediately respond to requests for comment.

Taiwan is seeking to build eight submarines, but the program has been hit by delays. The prototype’s maiden sea trial took place in June.

Taiwan’s government has made military modernization a key policy platform and has repeatedly pledged to spend more on its defense given the rising threat from China, including developing homegrown submarines.

Taiwan plans to boost defense spending by a fifth next year, surpassing 3% of gross domestic product, as it invests more in new equipment to better face China and convince the U.S. it is serious about building up its military.

In 2023, Reuters reported that South Korean authorities, citing the risk of Chinese economic retaliation, had charged a third Korean contractor for its work on Taiwan’s submarine project for violating trade laws. That contractor’s conviction has been overturned.

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