Court: "Choi Tae-won and Noh So-young Judgment Revision is Only a Mid-Fact Adjustment"..."No Impact on Conclusion"

"Supreme Court Precedent Allows Correction of Orders and Reasons in Property Division Cases"

Choi Tae-won, Chairman of SK Group (63), and Noh So-young, Director of Art Center Nabi (63), involved in their divorce lawsuit appeal trial, announced on the 18th that the ruling correction regarding the stock value of Daehan Telecom and SK C&C does not have a direct impact on the calculation of the property division amount or the trial outcome.

This statement was made in response to SK Group's related briefing held the previous day, which pointed out errors in the ruling and claimed that "the property division amount of 1.38 trillion KRW recognized by the second trial court will be significantly reduced in the Supreme Court." The court clarified that "only simple typographical and calculation errors were corrected, which are unrelated to the current value of SK stocks that serve as the basis for property division, so the conclusion of the trial will not change." However, controversy is expected to continue until the Supreme Court's final judgment is issued.

Chairman Choi Tae-won of SK Group (left) and Noh So-young, Director of Art Center Nabi, who are undergoing divorce litigation. [Image source=Yonhap News]

The Family Division 2 of the Seoul High Court (Presiding Judges Kim Si-cheol, Kim Ok-gon, Lee Dong-hyun) issued an explanatory document titled "Regarding the Judgment Correction Decision dated June 17" on the same day, expressing an apology: "We sincerely apologize for the inconvenience caused by discovering errors in calculations or descriptions in the judgment and subsequently correcting them."

The court further explained, "The correction of the judgment concerns the 'intermediate stage' facts related to continuous management activities from the plaintiff's father (the late Chairman Choi Jong-hyun) to the plaintiff (Choi Tae-won), who jointly contributed to the formation of Chairman Choi's assets. It corrects calculation errors that occurred in this context," and added, "The price of SK stocks as of the final property division reference date, April 16 of this year, which is 160,000 KRW per share, or the specific property division ratio, are not materially affected."

Regarding the judgment correction made the previous day, the court stated, "Only the errors in calculation and description appearing in the judgment reasons were retrospectively corrected by the method of judgment correction."

The court cited a 1997 Supreme Court precedent where an appellate court corrected both the order and reasoning of a judgment in a property division case following divorce, stating, "In property division cases following divorce, if errors in calculation or description related to fact-finding are discovered after the judgment is rendered, the judgment's content can be retrospectively corrected by the method of 'judgment correction,' according to precedent."

It added, "According to such precedent, if incorrect content is recorded in the judgment due to simple calculation errors, not only the 'reasoning' but also the 'order' can be corrected by the judgment correction method."

The court also refuted the Chairman's side's claim made the previous day that, following the judgment correction, the contribution to the increase in SK stock value was 125 times by the late Chairman Choi Jong-hyun and 35.6 times by Chairman Choi Tae-won, stating this was incorrect.

Previously, the court calculated the value of Daehan Telecom (the predecessor of SK C&C) at 8 KRW per share at the time Chairman Choi acquired it in November 1994, 100 KRW per share just before the death of the late Chairman Choi Jong-hyun in May 1998, and 35,650 KRW per share when SK C&C was listed in November 2009.

However, when Chairman Choi's side held a press conference the previous day claiming errors, the value for May 1998 was revised to 1,000 KRW per share.

Chairman Choi's side argued that, based on this judgment correction, the contribution to the increase in stock value by the late Chairman and Chairman Choi should be revised to 125 times and 35.6 times respectively, and thus the property division ruling of 1.38 trillion KRW was incorrect.

Provided by Seoul High Court.

However, in the explanatory document issued that day, the court pointed out, "The 35,650 KRW per share in November 2009 is an intermediate value and not the final comparison target or reference price," and added, "Based on this, the contributions of Chairman Choi and the late Chairman should be compared as 160 times and 125 times, respectively."

The court first stated, "Considering the stock split conducted afterward, if the value of Daehan Telecom stock was set at 8 KRW in 1994 and rose to 1,000 KRW in 1998 (the revised amount according to the judgment correction) at the time of the late Chairman's death, it can be seen that the value increased approximately 125 times during the late Chairman's four-year tenure."

The court continued, "On the other hand, if the Daehan Telecom stock valued at 1,000 KRW in 1998 transformed into the SK stock valued at 160,000 KRW per share as of the property division reference date (April 16, 2024, the conclusion of the appellate trial), it can be seen that the value increased approximately 160 times during the current Chairman's 26-year tenure."

It further noted, "The value of SK C&C stock, which is an intermediate form between Daehan Telecom stock and the SK stock in this case, was about 35,650 KRW at the time of its listing in November 2009. This is only an intermediate value and not the price as of the appellate trial conclusion date, April 16, 2024. Therefore, the 35,650 KRW (or approximately 35.6 times increase compared to 1998) is not the final comparison target or reference price."

The court explained, "In other words, when comparing the increase in stock value due to the late Chairman's management activities and the increase due to the current Chairman's management activities, the comparison should be between 125 times and 160 times, not 125 times and 35.6 times," adding, "This is because the current Chairman did not cease management activities in 2009 but has continued them until April 16, 2024."

In conclusion, the court stated that despite the judgment correction, the determination that not only Chairman Choi and the late Chairman but also former President Noh Tae-woo and Director Noh's side made intangible contributions to SK Group's growth remains unchanged, and the property division ratio conclusion of 65:35 based on this will not change.

The court said, "The reason Chairman Choi Jong-hyun could engage in extremely adventurous and risky management activities was because Director Noh's father, who was related by marriage, was the president," and added, "This was perceived as a protective shield or shield for group management, which ultimately led to successful management activities and achievements."