In the retrial of the divorce lawsuit between SK (034730) Group Chairman Chey Tae-won and Roh Soh-yeong, director of the Art Center Nabi, the SK Inc. shares held by Chey were again included in the assets subject to division. The court calculated the value of the shares based on the closing date of arguments in the appellate trial before the case was remanded, but reflected the subsequent sharp rise in the stock price in the asset division ratio, ordering Chey to pay Roh 944 billion won.
The Seoul High Court's Family Division 1 (presiding judge Lee Sang-joo) ruled on the 24th at the sentencing hearing for the asset division retrial of Chey and Roh: "Chey shall pay Roh 944 billion won plus delayed interest thereon."
The biggest point of contention was whether the SK Inc. shares held by Chey should be included in the assets subject to division as marital property. The first trial judged the SK Inc. shares to be Chey's separate property and excluded them from division. Separate property is property owned before marriage and is in principle not subject to asset division. In contrast, the appellate trial recognized Roh's contribution based on a comprehensive assessment of the marriage period and the timing and process of asset formation, and included the shares in the division. The retrial court reached the same conclusion as the appellate trial. The court stated, "The shares in question are property acquired under Chey's name during the marriage, and both spouses are recognized as having contributed to their formation and to maintaining and increasing their value."
The reference date for calculating the value of the assets subject to division was set as the closing date of arguments in the appellate trial before the remand. As SK Inc.'s stock price surged recently, which point's stock price should be used to assess the asset value emerged as another key issue. On April 16, 2024, the closing date of arguments in the appellate trial before the remand, SK Inc.'s stock price was in the 160,000 won range, but by the 26th of last month, the closing date of arguments in the retrial, it had risen to the 810,000 won range. The court cited a Supreme Court precedent holding that even when asset division is claimed after a judicial divorce is finalized, the assets subject to division and their value should in principle be set based on the closing date of arguments in the fact-finding trial of the divorce lawsuit. The court added, "Although the stock price rose sharply, it cannot be said that Chey's managerial contribution had no effect on that increase," and "it is difficult to view that even the gains or losses arising from whether the shares are disposed of after the divorce is finalized must all be shared with the former spouse."
However, the court did not reflect the sharp rise in SK Inc.'s stock price after the closing date of arguments in the appellate trial before the remand in the asset value, but instead considered it when determining the asset division ratio. The court explained that this was a measure to divide the marital property more equitably.
The court excluded the 30 billion won in support funds from the side of former President Roh Tae-woo, which had been reflected in the appellate trial, from the calculation of Roh's contribution. The Supreme Court had judged that even if the funds actually existed, they constituted illegal funds and therefore could not be evaluated as a contribution by Roh's side in the asset division process. Assets already gifted in relation to the formation and maintenance of marital property before the breakdown of the marriage were also excluded from division. Accordingly, the court set the asset division ratio at one-third for Roh and two-thirds for Chey. Roh's share was slightly reduced from before the remand. The court stated, "A significant portion of the marital property is assets formed and acquired during the marriage," and "in order to equitably distribute the marital property achieved through the cooperation of both parties, we took into account the fact that the value of the shares held by Chey rose sharply after the closing date of arguments in the appellate trial before the remand."
The asset division will be carried out through cash payment rather than by directly transferring the SK Inc. shares. The court ordered cash division, taking into account that the shares are the foundation of Chey's management control and dominance over SK Group.
Chey's attorneys said that day, "In the process of dissolving a marriage of nearly 20 years, Chey feels sorry for having caused concern to many people last year," and "we will state our specific position after closely reviewing the ruling." Roh's attorneys left the court without responding to reporters' questions.
Meanwhile, the business community's attention is focused on how Chey will raise the asset division payment, which reaches nearly 1 trillion won. There have been observations that Chey could sell some of his stake in SK Inc., the group's holding company, depending on the size of the asset division payment. If Chey were to dispose of his stake in SK Inc., which sits at the apex of SK Group's governance structure, the group's control could weaken.
However, with this ruling reducing the asset division payment by about 436.8 billion won from the appellate trial's 1.3808 trillion won, the analysis that Chey will maintain his 17.9% stake in SK Inc. as much as possible while raising cash through other assets and dividends is gaining traction.
Chey is expected to first mobilize stock-secured loans, real estate, and other cash-equivalent assets to raise funds. His stake in the unlisted SK Siltron, in which he holds an economic interest through total return swap (TRS) transactions, is also cited as a candidate for liquidation. The plan would involve separately selling the 29.4% that Chey personally holds, in addition to the 70.6% stake in SK Siltron that SK Inc. is in negotiations to sell to Doosan.
The two sides had initially discussed SK Siltron's enterprise value at around 5 trillion won, but as its value rose with the improving semiconductor industry conditions, they are reportedly recently engaged in a standoff over a level of 6 trillion to 7 trillion won. However, an SK official said, "The sale of the SK Siltron stake (personally held by Chey) is likely to be a lower priority in raising funds."
There are also suggestions that cash could be secured through expanded dividends from major affiliates such as SK Telecom and SK hynix. Hana Securities previously analyzed, "Expanding dividends from strong subsidiaries is virtually the only way to reduce problems related to SK Group's governance structure." The view is that if subsidiaries with high dividend capacity, including SK Telecom, increase their dividends, SK Inc.'s cash flow would improve, which could in the long term help expand Chey's dividend resources.
