Court: "Roh Tae-woo's slush funds were illegal bribes... Cannot be considered as No Soyoung's contribution"
"Management funds used before marital breakdown are not subject to property division"
Choi Tae-won, chairman of the Korea Chamber of Commerce and Industry, is entering the venue for the joint declaration ceremony of social dialogue held at Sarangjae in the National Assembly on the 15th.
The Supreme Court has ruled in favor of Choi Taewon, chairman of SK Group, in the so-called "divorce of the century" against No Soyoung, director of Art Center Nabi, which involves the division of assets worth 1.3808 trillion won. The court held that even if slush funds from the late former President Roh Taewoo, No Soyoung's father, were used to support SK Group, this cannot be recognized as No Soyoung's contribution in the division of assets. As the case has been sent back for retrial, the amount allocated to No Soyoung in the division of assets is expected to decrease significantly. Consequently, SK Group is projected to see a considerable reduction in liquidity pressure.
On October 16, the First Division of the Supreme Court (presiding judge: Seo Kyunghwan) overturned the previous ruling that ordered Choi Taewon to pay No Soyoung 1.3808 trillion won in the appeal trial of their divorce case and remanded the case to the Seoul High Court. However, the Supreme Court confirmed the previous judgment regarding 2 billion won in damages, finding no issue with the amount determined by the lower court.
The court stated, "Even if former President Roh Taewoo provided approximately 30 billion won to Choi Taewon's father, the late Choi Jonghyun, the source of these funds appears to be bribes received during Roh's presidency. Providing a large sum of money, as part of these bribes, to in-laws or one's child's spouse and keeping silent about it, thereby making it impossible for the state to trace or recover the funds, is contrary to good morals and social order. Such conduct is highly antisocial, unethical, and immoral, and thus falls outside the protection of the law."
The court further explained, "Even if No Soyoung claims her contribution in the division of assets rather than seeking the return of the funds provided by her father, the illegality cannot be disregarded. Since former President Roh's actions are not legally protected, they cannot be considered as No Soyoung's contribution in the division of assets."
Additionally, the Supreme Court noted that Choi Taewon's transfer of shares or payment of gift taxes to relatives before the breakdown of the marriage was a form of compensation to cousins who allowed him to smoothly inherit and secure management control of SK Group. Therefore, these actions could be seen as related to the maintenance or increase in value of the couple's joint property. However, the court also clarified that assets that no longer existed as of the closing date of arguments in the first and second instance divorce trials could not be subject to division.
No Soyoung, director of Art Center Nabi, is participating as a moderator and giving a lecture at the "Art Korea Lab Festival" held at Art Korea Lab in Jongno-gu, Seoul, on November 22 last year.
Between 2014 and 2018, Choi Taewon gifted approximately 3.29 million shares of SK to relatives and disposed of a total of approximately 92.7 billion won through foundation donations and salary returns, as well as paying 24.6 billion won in gift taxes on behalf of his younger brother, Choi Jaewon, executive vice chairman.
The court stated, "As the manager of SK Group, Choi Taewon's disposal of assets to secure business management rights or as part of smooth business operations cannot be excluded from being related to the maintenance or increase in value of the couple's joint property. Nevertheless, the previous court ruling was mistaken in including assets that Choi Taewon had already disposed of and no longer possessed as divisible property, misunderstanding the legal principles regarding the timing and subject of the calculation of divisible assets and failing to conduct the necessary review."
Previously, in July 2017, Choi Taewon filed for divorce mediation against No Soyoung, but as no agreement was reached by February 2018, the case proceeded to a formal lawsuit. In December 2019, No Soyoung filed a countersuit seeking division of assets.
In the first trial, the court ordered Choi Taewon to pay No Soyoung 100 million won in damages and 66.5 billion won in cash as part of the division of assets. However, the second trial estimated the couple's combined assets at approximately 4 trillion won and ordered Choi Taewon to pay No Soyoung 1.3808 trillion won, which is 35% of the total, as well as 2 billion won in damages. The appellate court based its decision on memos and promissory note envelopes from Kim Oksuk, wife of former President Roh Taewoo, concluding that SK Group had grown with the help of 30 billion won in slush funds.
However, the Supreme Court ruled that the lower court had significantly erred in calculating the asset division ratio by considering former President Roh's financial support, which should not have been taken into account in evaluating contributions to the division of assets, and ordered a retrial.
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