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Court rules in favor of tech firm in Citibank suit
By Chung Joo-wonPublished : May 10, 2013 - 20:54
A district court on Friday ruled in favor of semiconductor testing firm iTEST Co. in a lawsuit claiming Citibank Korea reaped unfair gains from transactions with the Korean company.
The Seoul Central District Court decided that the Korean operation of multinational bank Citibank did not sufficiently notify iTEST, a listed tech firm, of the high risks of KIKO, or “knock-in knock-out,” a financial derivative product that is highly susceptible to exchange rate changes.
The court ordered the bank to pay iTEST 18.9 billion won ($17 million), including 8 billion won for direct losses and an additional 10.9 billion won for lax notification of investment risks.
The court concluded that Citibank Korea unfairly pressured iTEST to prematurely close its KIKO contract.
Citibank Korea said it would appeal to a higher court, contending that the court appeared to have ruled in favor of iTEST without considering its efforts to extend the payment deadlines for iTEST and transfer the deal to a credit-based contract.
By Chung Joo-won (joowonc@heraldcorp.com)
The Seoul Central District Court decided that the Korean operation of multinational bank Citibank did not sufficiently notify iTEST, a listed tech firm, of the high risks of KIKO, or “knock-in knock-out,” a financial derivative product that is highly susceptible to exchange rate changes.
The court ordered the bank to pay iTEST 18.9 billion won ($17 million), including 8 billion won for direct losses and an additional 10.9 billion won for lax notification of investment risks.
The court concluded that Citibank Korea unfairly pressured iTEST to prematurely close its KIKO contract.
Citibank Korea said it would appeal to a higher court, contending that the court appeared to have ruled in favor of iTEST without considering its efforts to extend the payment deadlines for iTEST and transfer the deal to a credit-based contract.
By Chung Joo-won (joowonc@heraldcorp.com)
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