Request for 33% adequacy judgment for 盧 shares
“SK stock price rise, should not be reflected”
사진 확대 SK Group Chairman Chey Tae-won (left) and Art Center Director Noh So-young.
SK Group Chairman Chey Tae-won and Nabi, director of the Roh So-young Art Center, will again be judged by the Supreme Court. Chairman Choi’s side is expected to secure cash for the split while delaying the final ruling, while insisting that the amount of property division, which is close to KRW 1 trillion, is excessive.
On the 14th, Chairman Choi’s legal representatives said, “We have received an appeal to the Seoul High Court to be judged again by the Supreme Court.”
Chairman Choi argued that the proportion of the property set by Director Roh was too high. In May 2024, the second trial judged that director Roh’s stake in the joint property of the two was 35%. In October last year, the Supreme Court reversed and remanded Roh’s contributions, saying he should exclude some of his contributions, such as “Roh Tae-woo’s slush fund,” but last month, the court decided that Roh’s share was one-third (about 33%), almost the same as the second trial.
Chairman Choi said, “After the divorce was confirmed, the increase in SK’s stock price was taken into account in the division ratio, but we seek to determine whether it is appropriate to reflect the volatile stock price in the division ratio,” and added, “SK’s stock price, which was around 800,000 won at the end of the revocation hearing in June, has fallen to around 500,000 won.”
Another difficulty was the need to pay the entire property split in cash. Chairman Choi said, “We proposed to pay part of our assets as stocks (during the adjustment process), but Director Roh stuck to paying in full cash.”
Chairman Choi explained that the sale of SK Corp.’s stock to raise 944 billion won in cash will hurt the group’s management rights, and selling large quantities in a short period of time could adversely affect the stock market.
Another issue is expected to be the fact that Chairman Choi’s 29.4% stake in SK Siltron is valued at 750 billion won and divided. The legal representatives said, “The purchase of the stake in SK Siltron was made in 2017 when the marriage already broke down, and director Roh did not participate in the contract or contribute to maintaining the property,” adding, “SK Siltron has no management premium due to Doosan’s acquisition, and if the stake is sold in the future, there is much less cash to be secured by generating taxes.”
Chairman Choi’s side is expected to delay the decision due to the Supreme Court’s re-appeal and raise cash in the meantime. Another reason for the appeal was that Chairman Choi must disclose at least 30 trading days in advance if he wants to sell his stake in SK Corp. by more than 1% or more than 5 billion won under the “insider transaction pre-disclosure system.” If the ruling is confirmed without a re-appeal, failure to pay 944 billion won will immediately result in 5% delayed interest per year. The total amount is 47.2 billion won per year and 129.32 million won per day.
9 years of legal battle…Five trials to the Supreme Court
Choi, the eldest son of the late SK president Choi Jong-hyun, and Roh, the daughter of the late former President Roh Tae-woo, met while studying at Chicago University in the U.S. and married in 1988. The meeting between the daughter of the incumbent president and the son of the family of the head of a large company drew attention, and they had three children.
Chairman Choi revealed the existence of an extramarital child in 2015, and the news of the breakup of the two was announced. Chairman Choi filed for divorce settlement in 2017, but it broke down and entered a formal lawsuit in February of the following year. Director Roh filed a counter-suit in December 2019, saying he would accept the divorce.
In December 2022, the first trial of the Seoul Family Court ruled that Chairman Choi should pay Roh KRW 100 million in alimony and KRW 66.5 billion in cash in property division. Chairman Choi’s SK stock was judged to be a unique property received through inheritance and donation, not a joint property subject to division.
The second trial court increased the amount of property division and alimony that Chairman Choi should pay to 1.388 trillion won and 2 billion won, respectively, 20 times higher than the first trial. The intention was that 30 billion won of former President Roh’s slush funds flowed into SK Group’s growth, so it should be recognized as a contribution of director Roh.
In October last year, the Supreme Court overturned the judgment that former President Roh’s slush funds were illegal funds even if they were real, so they could not be protected in lawsuits. Chairman Choi’s 1.11 trillion won paid to relatives and others before the divorce lawsuit was also a choice to defend management rights, so it should be excluded from the division. The amount of joint property decreased from 4.115 trillion won recognized in the second trial to 2.89999 trillion won.
The court of remand reduced the ratio of director Roh’s property to one-third (33.3%) as recognized by the second trial. Although “No Tae-woo’s slush fund” was omitted from the calculation, it was recognized that director Roh contributed to the growth of SK Group by taking charge of housework and raising children. It was also taken into account that SK Co., Ltd.’s stock price was 160,000 won per share at the end of the second trial on April 16, 2024, but it soared more than five times to 810,000 won per share on the end of the revocation and repatriation hearing in June.