What Is Wealth... Hundreds of Billions in Lawsuits Among Chaebol Families

Lee Boo-jin and Lim Woo-jae, 14.1 Billion Won Split
Lee Jae-yong and Chung Yong-jin, Burden of Public Divorce Process... 'Swift' Mediation

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

[Asia Economy Reporter Choi Seoyoon] The property division amount between SK Group Chairman Chey Tae-won and Art Center Nabi Director Noh Soyoung has been set at around 60 billion KRW. This is the largest known property division amount resulting from a divorce among domestic chaebol families. When divorce agreements or mediations fail, the division amount is often disclosed externally. In Chairman Chey’s case, he filed for divorce mediation against Director Noh in 2017 but failed to reach an agreement, leading to a five-year legal battle. Conversely, there is the case of Samsung Electronics Chairman Lee Jae-yong and Daesang Vice Chairman Lim Seryeong, who reached mediation within a week in their 2009 divorce.

Hotel Shilla’s Lee Boo-jin Ordered to Pay Ex-Husband 14.1 Billion KRW

Since most chaebol family assets are composed of stocks, property division after divorce is generally considered to have some impact on corporate governance. This attracts considerable attention.

The largest property division case before Chairman Chey was the divorce between the late Samsung Group Chairman Lee Kun-hee’s eldest daughter, Hotel Shilla President Lee Boo-jin, and former Samsung Electro-Mechanics Executive Director Lim Woo-jae. Their marriage in August 1999 attracted attention as a union between a third-generation Samsung Group owner and a regular employee, but in October 2014, President Lee filed for divorce mediation. During the lawsuit, former Executive Director Lim claimed that President Lee’s total assets were around 2.5 trillion KRW and demanded about half, approximately 1.2 trillion KRW, as property division. This was the largest domestic property division claim known at the time. The amount finally recognized by the Supreme Court in January 2020 was about 14.1 billion KRW.

Former Korean Air Vice President Cho Hyun-ah, who caused controversy with the so-called “nut rage” incident, was ordered in a first trial last month to pay her spouse 1.33 billion KRW and divorce after a 4-year and 7-month lawsuit. Cho married Dr. Park, a plastic surgeon, in 2010, but Park filed for divorce in 2018 after eight years of marriage. Park alleged that Cho verbally and physically abused her, while Cho countersued, claiming difficulties in their marriage due to Park’s alcoholism. Their conflict escalated to criminal charges, and Cho received a summary order in April 2020 to pay a fine of 3 million KRW for assault.

In the case of Kim Taek-jin, CEO of NCSoft, he gifted 1.76% of the company’s shares to his ex-wife as part of property division during their divorce in 2004. At that time, the shares were worth around 30 billion KRW. The property division trial of Smilegate founder Kwon Hyuk-bin, who has assets worth about 9 trillion KRW, is also attracting attention as it is expected to become the largest ever depending on the outcome.

Quiet 'Mediation' Chosen by Lee Jae-yong and Chung Yong-jin

Typically, divorce lawsuits take years to conclude and the process is fully exposed to the public. For this reason, some chaebol family divorces have ended quickly through mediation.

The case of Vice Chairman Lee and Vice Chairman Lim is representative. They divorced in 2009 after 11 years of marriage. Initially, Vice Chairman Lim filed for divorce and property division lawsuits, but mediation was reached within a week. The specific terms of the mediation were not disclosed, but it is reported that Vice Chairman Lim demanded several billion KRW in assets and custody rights.

Shinsegae Vice Chairman Chung Yong-jin married top actress Go Hyun-jung in 1995, but the couple separated in November 2003 after eight years of marriage due to personality differences and domestic discord. Their divorce proceeded quickly, just two hours after Go filed for mediation. It is reported that Vice Chairman Chung agreed to pay Go 1.5 billion KRW in alimony while retaining custody of their children. The amount of their property division was also not disclosed externally.