Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Kakao, SK in blame game over fire at data center
A Kakao-affiliated taxi passes by SK C&C's data center building in Seongnam, Gyeonggi Province, Monday. Korea Times photo by Seo Jae-hoon
By Park Jae-hyuk
Both companies about to begin legal battle over compensation for damage
By Park Jae-hyuk
SK On, the battery manufacturing subsidiary of SK Group, is facing an allegation that a spark from its battery inside SK C&C's data center building in Seongnam, Gyeonggi Province, caused the worst-ever disruptions in Kakao's digital services last weekend, according to industry officials, Thursday.
Kakao CEO Hong Eun-taek said at Wednesday's press conference that a lithium-ion battery in the building's electrical control room caught fire and caused the outage of thousands of Kakao server devices on the upper floor.
Hong added that he heard SK On is the manufacturer of the batteries. Before Kakao's press conference, SK C&C had not named the manufacturer of the batteries inside its building.
At this moment, it is unclear whether the fire was a result of a battery defect. The police and the fire authorities are still investigating the main cause of the fire.
Some industry officials attributed the accident to possible flaws in a battery management system (BMS) or the design of the building. A local news outlet reported on Thursday that SK C&C failed to prevent the fire, even after its worker inspected the building twice in response to BMS warnings, which were sent several hours before the fire broke out.
SK C&C, however, denied the news report, saying the BMS did not send any warning.
“The graph showing the condition of the lithium-ion battery presumed to have caught fire had remained stable until the moment of the accident at 15:19,” the company said in Thursday's press release. “The BMS only sends warnings in case of a wild fluctuation in the graph. Our worker, therefore, did not visit the building to check the facility.”
SK On also sent SK C&C's press release to journalists the same day.
As the blame game has intensified over who is responsible for the cause of the fire, both SK and Kakao have reportedly prepared for a legal battle over compensation for losses.
Earlier this week, Kakao said in its regulatory filing that it plans to discuss damages for losses of Kakao and its affiliates with SK C&C after normalizing its services. However, SK C&C said that Kakao did not discuss with them about compensation before making this announcement.
According to industry officials, SK C&C hired the nation's largest law firm, Kim & Chang, to undertake litigation. Kakao is also said to be looking for a law firm.