SK Corp. Shares Settled with 0.43% Cash to Conclude Divorce Lawsuit

Chairman Chey Tae-won and Director Noh So-young Divorce Lawsuit First Trial Verdict
"Pay 100 million won in alimony and 66.5 billion won in property division"

Small compared to Director Noh's demand for shares worth 1.3 trillion won
Escapes concerns over large-scale share division

Chairman Chey Tae-won of SK Group (left) and Director Noh So-young of Art Center Nabi (right). [Image source=Yonhap News]

[Asia Economy Reporter Jeong Dong-hoon] Chey Tae-won, chairman of SK Group, who was involved in a divorce lawsuit worth over 1 trillion won with No So-young, director of Art Center Nabi, has accepted the court ruling ordering him to pay "100 million won in alimony and 65.5 billion won in property division." Since the large-scale transfer of shares that was feared did not occur, SK Group is expected to be free from owner risk due to changes in the shareholding structure.

The Family Agreement Division 2 of the Seoul Family Court (Chief Judge Kim Hyun-jung) accepted the divorce lawsuit filed by both parties on the 6th and ruled, "The two shall divorce," and "The plaintiff (Chairman Chey) shall pay the defendant (Director No) 100 million won in alimony and 66.5 billion won in property division."

This comes seven years after Chairman Chey expressed his intention to divorce Director No in 2015. Subsequently, Chairman Chey officially entered legal proceedings by applying for divorce mediation in July 2017. The parties failed to reach mediation, and the divorce ultimately proceeded to litigation. Director No, who opposed the divorce, changed her stance in December 2019 to agree to the divorce and filed a counterclaim.

Director No demanded 300 million won in alimony and 42.29% of the shares of SK Inc., the group’s holding company, owned by Chairman Chey. Chairman Chey holds about 18.29% of the total SK Inc. shares (approximately 12,975,472 shares). The shares demanded by Director No correspond to about 7.73% of the total SK shares (approximately 6.5 million shares). Based on the closing price of the previous day, this amounts to about 1.37 trillion won.

However, under this ruling, Director No will receive 66.5 billion won in property division instead of SK Inc. shares. Converted into SK Inc. shares, this is about 310,000 shares (worth 66.5 billion won based on the closing price on the 5th), representing approximately 0.43% of the shares. SK Inc.'s market capitalization exceeds about 15.6 trillion won.

Accordingly, Chairman Chey has alleviated concerns that his group control might weaken due to a large-scale share division during the property division process. SK Inc., the holding company, has subsidiaries including SK Innovation and SK Telecom, which are core companies of SK Group. Since SK Hynix is also a subsidiary of SK Square, there were concerns that decision-making and governance structure changes could follow the divorce lawsuit filed by Director No at that time.