By Diplomacy Journal Lee Kap-soo
SK Group Chairman Chey Tae-won was ordered by an appellate court on May 30 to pay his estranged wife Roh So-young, the former late President Roh Tae-woo's only daughter, 1.38 trillion won (US$1 bil.) in property division and 2 billion won in alimony as part of his divorce from Roh.
As for Choi's shares in SK Inc., a group holding company, which were not recognized as property to be divided in the first trial, the second trial ruled that the shares were subject to property division, saying that Roh had a contributory share.
As the second trial court in the divorce case between SK Group Chairman Chey Tae-won and Art Center Nabi Director Roh So-young ruled that Chey’s shares in SK Inc. are also subject to division, it will be interesting to see how this will affect Chey's control of the group.
SK Group controls SK innovation, SK telecom, SK square, SK E&S, SKC, SK networks, SK eco-plant, and other affiliated companies through SK Inc., the holdings company of SK Group. Chairman Chey is the largest shareholder with a 17.73% stake in SK Inc.
His 17.73% stake in SK Inc. is worth about 2 trillion won at the current stock price. If Chey is forced to sell a significant portion of his SK Inc., his control of the group could be shaken.
The Seoul High Court's Family Division 2 (Presiding Judge Kim Si-cheol) ruled this in the second trial of the couple's divorce case. The amount is a significant increase from the 665 billion won in property division and 100 million won in alimony recognized by the first trial in December 2022. It is reportedly the largest property division ever.
“Chairman Chey spent more than 21.9 billion won ($20.5 million) on the measurable part alone and provided incalculable economic benefits, such as maintaining a relationship with Kim Hee-young, chairwoman of the TNC Foundation, after separating from Noh,” the court said, adding, “The amount of alimony awarded in the first trial, which calculated the mental pain of the marital breakdown, was too small.”
“It must be considered that Roh contributed to the increase in value or management activities of SK Group,” the court said, adding that “all of Chey's assets are subject to division.” The court overturned the first court's decision that Chey's shares in SK Inc. were not subject to division.
The tribunal found that late former President Noh's contribution to the management of SK Group was intangible, saying, “We believe that Noh ultimately acted as a shield for SK Group and consequently made an intangible contribution to the successful management activities of SK Group.” The tribunal valued the two persons' combined wealth at approximately 4 trillion won and set a property division ratio of 65% for Chey and 35% for Roh.
The tribunal also criticized Chey for “suspending her credit card from February 2019 even though the marriage was not dissolved, and stopping cash support for living expenses after the first judgment,” adding, “He has not shown any sincere remorse for his misconduct during the litigation process and has shown no respect for monogamy.”
Chey is the son of the late SK Group founding chairman Chey Jong-hyun, and Roh is the daughter of the late former President Roh Tae-woo. The two married in September 1988, the first year of Roh's presidency, and had three children. However, in 2015, Chey announced his intention to divorce Roh through the media, revealing the existence of a child out of wedlock. In 2017, Chey filed for divorce mediation, but the two sides were unable to reach a settlement, leading to divorce proceedings.
Roh refused for a while, but in December 2019, she filed a counter-suit, saying that she would accept the divorce. She demanded 42.29% (6.5 million shares) of Chey's shares in SK Inc., the group's holding company, as part of the property division. The shares were worth about 1.37 trillion won at the time. She also requested 300 million won in alimony.
However, in December 2022, the first court ruled that the shares were not subject to property division because “it is difficult to believe that Roh contributed to the formation, maintenance, and increase in value of SK Inc.,” and ordered Chey to pay only 66.5 billion won in property division and 100 million won in alimony in cash.
On appeal, Roh increased the amount of property division to about 2 trillion won and the amount of alimony to 3 billion won.
During the second trial, Roh also claimed that some 34.3 billion won of her father, former President Roh Tae-woo's “secret funds” were transferred to Chey Jong-hyun and Chey Tae-won in the 1990s and used to buy a securities company in 1992 and SK shares in 1994. Chey's camp countered that the money never flowed into SK Group, and such a fact was also confirmed during the 1995 investigation into the former president Roh's secret funds.
