"Daehan Telecom Per Share Value Does Not Consider Stock Split"
"Chairman Choi's Contribution Misjudged from '35.5x to 355x'"
SK Group Chairman Chey Tae-won announced on the 17th that a critical error was found in the 'stock value assessment' during the property division judgment in the appeal trial of the divorce lawsuit with No So-young, director of Art Center Nabi. It is claimed that the court did not consider the stock split of the shares held by Chairman Chey when calculating their value.
Lee Dong-geun, legal representative and lawyer at the law firm Hwawoo representing Chairman Chey, held a briefing on the trial issues at the SK Seorin Building in Jongno, Seoul, on the morning of the same day, stating, "The appellate court made a serious error in assessing the value of the Daehan Telecom shares acquired by Chairman Chey in 1994."
Chairman Chey Tae-won of SK Group is bowing his head in apology while attending a briefing on recent trial issues at the SK Seorin Building in Jongno-gu, Seoul on the 17th. (Photo by SK)
Daehan Telecom (now SK C&C) is the company that became the foundation of SK Inc. The late SK Chairman Chey Jong-hyun gifted approximately 280 million KRW to Chairman Chey in 1994 to acquire Daehan Telecom shares. Using this money, Chairman Chey purchased 700,000 shares of Daehan Telecom in November of the same year at 400 KRW per share.
The appellate court calculated the value of Daehan Telecom shares at 8 KRW per share at the time of acquisition by Chairman Chey in November 1994, 100 KRW per share in May 1998 just before the late Chairman’s passing, and 35,650 KRW per share in November 2009 when SK C&C was listed.
However, it was pointed out that the stock price of Daehan Telecom was reduced to 1/50th of the original nominal value after two stock splits following the company’s name change to SK C&C in 1998: once in March 2007 (1:20 ratio) and again in April 2009 (1:2.5 ratio).
Accordingly, the court compared the value increase from 1994 to 1998 before the late Chairman’s passing and from then until SK C&C’s listing in 2009, judging the late Chairman’s contribution as 12.5 times and Chairman Chey’s contribution as 355 times.
Hansangdal, an accountant at Cheonghyeon Accounting Corporation, explained, "Considering the two stock splits, the value of Daehan Telecom shares in May 1998 should be 1,000 KRW per share, not 100 KRW."
According to SK’s claim, the late Chairman’s contribution, originally calculated as 12.5 times by the court, would increase tenfold to 125 times, while Chairman Chey’s contribution, calculated as 355 times, would decrease to 35.5 times, resulting in a distortion of '100 times.'
Lawyer Lee said, "The appellate court, based on incorrect results, underestimated the portion of succession inherited by Chairman Chey and effectively labeled him as a 'self-made entrepreneur' who founded the business. Since the court decided to include SK Inc. shares as part of the divisible property and considered this in calculating the division ratio, it is necessary to correct the critical error and re-derive the conclusion."
Furthermore, Chairman Chey refuted the appellate court’s judgment that SK grew due to tangible and intangible contributions such as slush funds from No So-young’s father, former President Roh Tae-woo.
Chairman Chey stated, "There is a ruling that denies the entire history of SK due to the halo effect of the Sixth Republic and claims that the business grew because of this halo effect. This is not true." He added, "I believe that not only myself but all members of SK Group have had their honor and pride diminished and damaged. I sincerely hope for a wise judgment from the Supreme Court to correct this."
He also apologized, saying, "I apologize to the public for causing concern due to personal matters. Regardless of the court’s ruling, I will continue to fulfill my responsibilities in management more diligently and strive to contribute to the national economy."
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