On the 10th, the audit committee pointed out… Urging to strengthen global-level compliance functions
LG-SK meets and negotiates earlier this month… “The compensation gap widens”
(Seoul = Yonhap News) Reporter Misook Seo = SK Innovation[096770] The board of directors informed the company that it cannot be accepted if the compensation required by LG is excessive in relation to the final decision on the battery trade secret infringement dispute between LG Energy Solutions and the US International Trade Commission (ITC).
LG and SK met once in connection with the compensation negotiations earlier this month, but it is said that the agreement will still face difficulties as the compensation gap claimed by the two sides widens more than before.
According to SK Innovation on the 11th, the board of directors of the company held an expanded audit committee attended by all outside directors on the previous day to in-depth review the final ITC decision made on the 10th of last month (US local time).
![SK headquarters building [연합뉴스 자료사진]](https://i0.wp.com/img3.yna.co.kr/etc/inner/KR/2021/03/11/AKR20210311040752003_01_i_P4.jpg?w=560&ssl=1)
SK headquarters building [연합뉴스 자료사진]
At this meeting, the board of directors said, “We will look closely at the requirements of competitors (LG Energy Solutions) from the board level in the future. “It will be.”
This means that if LG Energy Solutions demands excessive compensation, which is difficult to accommodate, it is possible to consider withdrawal of the US business.
With the deadline for exercising the US President’s veto on the final decision of the ITC one month in the future, SK Innovation seems to have specifically disclosed the terms and conditions of negotiations to the board of directors in order to negotiate full-scale compensation.
Depending on the outcome of the negotiations, they tried to persuade the board of directors in advance to relieve the fear of neglect, such as excessive compensation payments or business disruption caused by a failure to reach an agreement.
Prior to the board of directors, senior officials from LG Energy Solutions and SK Innovation are known to have negotiated once on the 5th, the day the final decision of ITC was released.
However, it is reported that the gap in compensation presented by both sides has widened as LG, who completely won the trade secret infringement, demanded higher compensation than before.
SK is planning to take time to negotiate by mobilizing procedures such as appeal while taking the life and death of U.S. President Joe Biden’s veto.
The board of directors of SK Innovation decided to visit sites such as Daedeok Battery Research Institute in person in order to settle the position related to the ITC litigation sooner or later and to come up with a fundamental improvement plan.
Along with this, the board criticized the defeat of the ITC litigation because it was poorly coped with the US judicial process due to lack of experience in global disputes, and urged to strengthen the global level of compliance (compliance monitoring) functions.
In this ITC lawsuit, SK Innovation is claiming that it has been banned from imports from ITC without properly verifying whether it has infringed on trade secrets due to’document deletion’.
The board of directors ordered to reorganize the global lawsuit response system internally, using this lawsuit as a counter-teacher.
Accordingly, SK Innovation plans to appoint external experts in the field of global compliance from the United States in the near future to advance the compliance monitoring system.
Meanwhile, LG Energy Solutions showed a position that it lacked sincerity in solving the problem to the reaction of the SK board of directors on the day.
LG Energy Solutions said, “It is unreasonable to say that our proposal based on the US Federal Trade Secret Protection Act is an unreasonable request from the perpetrator’s point of view and is unacceptable.” And various compensation methods, such as equity, etc., will be possible.”
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2021/03/11 15:57 sent