[Viewpoint] The Meaning of SK's 2 Billion Won Alimony

Alimony Is Compensation for Emotional Damages
Who Will Take Responsibility for the Damages Suffered by SK Employees?

"I received 30 million won as alimony."

A friend who separated from their spouse a few years ago said this. I thought it was a small amount. Fundamentally, the other party was at fault. The liable spouse was a professional who earned a large sum of money. Later, I learned that 30 million won was practically the maximum amount that could be received as alimony. Until about ten years ago, the typical upper limit for alimony in cases of infidelity was around 15 million won.

What significantly raised this limit was a 2016 divorce lawsuit ruling involving a female broadcaster. She married without knowing that her partner was married. The partner even had an extramarital child after marriage and physically abused the spouse. The court awarded 50 million won in alimony. Since then, rulings of 20 million and 30 million won have been made. Until recently, divorce specialists said, "Even with infidelity, assault, and an extramarital child, the alimony cap is 50 million won."

Last year, I was surprised when the 50 million won alimony ceiling was broken. The couple of SK Chairman Chey Tae-won and Noh So-young, director of the Art Center Nabi, ushered in the era of alimony in the hundreds of millions. The family court (first trial) last year ordered Chairman Chey to pay 100 million won in alimony. A major factor was that he himself revealed the existence of an extramarital child. This falls under Article 840 of the Civil Act, "spouse's wrongful act" and "serious reasons making it difficult to continue the marriage." This was about one-third of the alimony amount that Director Noh demanded at the time.

Also, at the end of last month, the Seoul High Court (second trial) ruled that Chairman Chey Tae-won must pay 2 billion won in alimony. This is about three times the amount Director Noh requested. The Seoul High Court clearly stated the basis for calculating alimony: "Chairman Chey admitted to the wrongful act in 2005 and had an extramarital child in 2010. He left home in 2011 and has been living separately for over ten years while maintaining a de facto marital relationship. Director Noh was diagnosed with breast cancer in May 2009, and it is considered that she suffered mental shock."

From now on, rulings awarding alimony in the hundreds of millions will follow one after another. The court determines the amount of alimony by considering the circumstances, duration, and frequency of the wrongful acts, age, occupation, and assets. However, precedents and prior cases are also important. If the highest amount ever was 50 million won, 100 million won would have been difficult. Now there is a precedent of 2 billion won. Discussions about 500 million and 1 billion won alimony will become common.

However, for asset owners worth trillions, 2 billion won is, as the saying goes, pocket change. The big chunk is property division. The first trial court ordered Chairman Chey to pay 66.5 billion won in property division. In the second trial, that amount soared to 1.38 trillion won. Underlying this is the judgment that 30 billion won in slush funds from former President Noh Tae-woo, Director Noh’s father, flowed into SK and played a significant role in the company’s growth.

Seonkyung, whose main product was school uniforms, transformed into Korea’s top mobile telecommunications company and a world-class semiconductor manufacturer after the couple married in 1988. In the process, countless SK employees worked hard. How much of that contribution belongs to the couple? Probably less than a drop in the ocean. But judging from the ruling, it seems SK reached its current position thanks to illegal slush funds from past regimes and collusion between the ruling power and the owner family.

Alimony (慰藉料) is compensation for mental damages. SK Group has about 126,000 employees. Including retirees and those who have left, the number is several times that. For children, parents; for students, schools; for workers, companies are the most important parts of life and sources of pride. Imagine if the frustration and anger felt by hundreds of thousands were combined and compensated as alimony. I was surprised by alimony exceeding 100 million won in divorce cases. But if hundreds of thousands filed a class-action lawsuit and received alimony exceeding 1.38 trillion won, it would not be surprising.