SK Innovation to set up 'global compliance system' after losing US battery trade-secrets case with LG Chem

by Margaret Lau
Governor Brian Kemp of Georgia has urged President Biden to overturn the ITC ruling. Photo: Governor's office
South Korea’s SK Innovation (SKI) has been ordered to establish "a complete global compliance system”, in the wake of a US ban on imports after losing a trade secrets case brought by battery-manufacturing rival LG Chem.

The order by the company’s audit committee comes amid a board-level shake-up, after the US International Trade Commission (ITC) accused SKI of an "extraordinary” destruction of evidence in the case – and slapped the firm with an import ban that could derail its US investments, such as a battery manufacturing project in Georgia.

The audit committee, headed by SKI chairman Kim Jong-hoon and comprised of outside experts, warned the decision could spell the end of the firm’s battery business interests in the US – although it revealed behind-the-scenes talks with LG Chem, in a bid to resolve the issue, were still under way.

'Lack of experience'

However, the committee rebuked SKI’s leadership for its "lack of experience in global disputes” and for failing to mount an effective defence of the US case, saying it was now "urgent and critical to establish a global-level lawsuit response and compliance system” to prevent future such situations.

The ITC import ban is set to take effect next month unless overturned by President Joe Biden, who has pledged to champion batteries and clean energy tech to achieve climate change goals.

Ford and Volkswagen are among companies that have told the ITC of their concern about the impact of its ruling on their supply chains. The agency also received representations from state and federal lawmakers, some expressing concern about future investment in Georgia, where SKI subsidiary SK Battery America is building a battery production facility.

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SK Innovation accused of 'extraordinary evidence destruction' in EV battery trade secrets case with LG Chem