Shares in LG Electronics and LG Chem fell sharply early on Wednesday after media reports of an explosion in a notebook computer that may be linked to the machine's battery.
LG makes notebook computers and buys computer batteries from LG Chem and other suppliers.
LG Electronics officials later confirmed the battery in the exploded laptop came from LG Chem and both companies were looking into the incident.
It was not immediately clear whether the explosion was due to a problem in the computer or its battery, or for other reasons.
LG Electronics shares were down 6.67 percent by 0127 GMT, trading at 98,000 compared with the KOSPI's 1.5 percent loss. LG Chem shares were 6.15 percent lower at 79,400 won.
Several Korean newspapers reported that a battery pack in a notebook owned by a local journalist exploded on Tuesday while in the sleeping mode. No one was injured in the incident.
News cable YTN showed flame and smoke rising from the machine, which was left destroyed.
"The notebook business accounts for only about 2 percent in LG Electronics' sales," said Kim Ik-sang, an analyst at CJ Investment & Securities. "It's about concerns that this could dent LG's brand image, but the impact won't last long."