Dozens of Korean and foreign suppliers of Samsung Electro-Mechanics are seeking legal action against the electronics parts manufacturing unit of Samsung Group for its alleged mishandling of production contracts.

BeCom, a local manufacturer, said Tuesday that the company, together with its 14 subcontractors in Korea and overseas, were suffering from combined financial losses of 46 billion won ($39 million) due to Samsung’s unilateral breach of contract.

In June, BeCom inked a deal with Samsung Electro-Mechanics to supply wireless charging pads for Samsung’s latest flagship smartphone, the Galaxy S6. Under the deal, the supplier was also in charge of selling and marketing the products on behalf of Samsung. 

After the first batch of 22,000 sample products were shipped, however, Samsung requested BeCom not to use its brand logo on the finished products.

“Without the Samsung logo, it would be extremely difficult to find customers even though the products are made solely for Samsung phones,” said a BeCom official. “We have asked for adequate compensation but no clear answer has been given.”

He added the suppliers were considering filing a lawsuit against Samsung Electronics vice chairman Lee Jae-yong depending on the compensation talks.

Samsung Electro-Mechanics admitted its responsibility for causing damage to its partners and claimed the company had tried to compensate them but failed to reach an agreement on the amount.

“We didn’t fully recognize corporate rules that allow products directly sold by Samsung only to carry the Samsung logo,” said a company official. “We tried to change contract terms based on the rules but the partners refused to do so.”

Industry sources said the recent feud could have stemmed from the internal conflict between Samsung Electro-Mechanics and Samsung Electronics over leadership in the group’s new wireless charging business.

The two Samsung units are respectively producing wireless charging pads working compatibly with the Galaxy S6 lineup.

“Even though Samsung Electro-Mechanics secured related technologies first, the initiative seems to be shifting toward Samsung Electronics, the group’s crown jewel, as the business is gaining attention,” said an industry source on condition of anonymity.

“Their overlapped productions are also inefficient. There is more room for disputes.”

Asked about this internal conflict, however, the Samsung Electro-Mechanics official flatly denied it, saying the two firms were still running their own businesses separately and seeking expansion.

“We will continue to try to reach an agreement with the partner firms,” he added.

By Kim Young-won  (wone0102@heraldcorp.com)