SK directors criticize management's handling of LG dispute
It also said it will not accept settlement terms proposed by LG if the amount is considered excessive.
SK Innovation’s board of directors held an extended audit committee on March 10 attended by all five external directors to be briefed about the latest progress in the battery trade secret dispute with LG.
The committee strongly rebuked the company’s management for handling the legal case without full knowledge of the U.S. legal system.
The committee ordered the management to fortify its global compliance team by hiring external experts and to renew its global litigation response team.
“It is regretful that SK Innovation lost the lawsuit due to the company’s lack of expertise in the U.S. legal system,” Choi Woo-seok, head of the committee, said.
“It is of great importance for SK Innovation to fortify its compliance system up to global standard at a time when the company has to further expand its business globally.”
The U.S. International Trade Commission (ITC) in February ruled in favor of LG Energy Solution on a two-year case regarding electric vehicle (EV) battery trade secrets, banning SK Innovation from importing battery products and components to the United States for the next 10 years with a few temporary exceptions.
Last week, the ITC disclosed the full judgement of the ruling, where it accepted LG’s claim that SK misappropriated 22 trade secrets from its rival.
The two companies have reportedly met since the February ruling, with LG requesting 3 trillion won ($2.7 billion) in settlement money, while SK proposed a little less than 1 trillion won.
SK Innovation’s audit committee said it will review LG’s requests but said “the request will not be acceptable if it is up to the point where continuing the battery business in the United States becomes meaningless or greatly damages the company’s competitiveness.”
If the two sides can't reach a settlement, SK Innovation is banking on U.S. President Joe Biden vetoing the ITC’s ruling by claiming the withdrawal of the company's promised investment in the United States will greatly hurt the current administration’s green initiative. The decision has to be made within 60 days of the ITC ruling, which came out on Feb. 10.
“It is absurd for the perpetrator to say they cannot accept the proposal because it is too much while it is calculated based on the U.S. Defend Trade Secret Act, which is considered the global standard,” said LG Energy Solution in a statement Thursday.
BY JIN EUN-SOO [email@example.com]