Hello Prakash,
Further to what Kamesh mentioned, the situation you mentioned would come under the purview of something called Non-Compete Clause/Agreement.
Usually this is got signed by the Company while joining,,,,NOT while leaving/resigning. Maybe in your Company's case they may have had some recent issues of people leaving & joining competitors.
However, pl note that this practice is NOT illegal PROVIDED.....repeat PROVIDED.... there's a timeline associated with it. Like 'you can't join competitor companies within 1/2/3/........ years'. In fact even the Indian Defence Forces have this Clause [called 'Cooling Period'] where the Officer can't join any Company which has done business with the Armed Forces AND in which the individual concerned has been involved, for a period of 1 year after being relieved from the Forces.
One can't have a timeless or permanent barring of joining competitors......like Kamesh indicated.
The primary purpose of this is to protect the Company trade secrets, etc & more senior the person quitting, more seriously is this followed.
And I don't think your Company being Korean has anything to do with this situation---Korean, Japanese & Western Companies have this practice as a SOP which, like I mentioned above, is a part of the initial Joining policy itself. I wouldn't be surprised IF your Production manager knew about this earlier itself but chose to ignore it until now.
Rgds,
TS