Wednesday, June 12, 2024

SK Chairman’s Divorce of the Century

Yonhap News Agency

Choi Tae-won (63), chairman of SK Group, married Roh So-young (63), director of the Art Center Butterfly, in September 1988 and had three children, but they broke up in 2015.

At the time, Chairman Choi said, “I have had a deep goal with Director Roh for more than 10 years,” announcing the existence of an out-of-wedlock child between Kim Hee-young, chairman of the TNC Foundation, and announcing his intention to divorce.

In July 2017, he applied for divorce mediation and began full-fledged legal proceedings, but could not reach an agreement, leading to a lawsuit in February 2018.

Director Roh, who had maintained that he could not divorce, changed his position and filed a counterclaim (counterclaim) in December 2019.

Instead of divorcing, Roh demanded to pay 300 million won in alimony and 50 percent of Chairman Choi’s stake in SK Corp.

The first trial court judged that SK stocks owned by Chairman Choi were not subject to property division because their shares in SK affiliates, which were donated and inherited by their father, former Chairman Choi Jong-hyun, were “special properties” originating from them.

Then, during the appeals trial, Roh changed the subject of property division to “cash 2 trillion won” rather than stocks, and raised the required alimony to 3 billion won.

In the 1990s, about 34.3 billion won of his father, former President Roh Tae-woo, was delivered to former Chairman Choi Jong-hyun and Chairman Choi, and was used to acquire securities firms in 1992 and buy SK stocks in 1994.

On the other hand, Chairman Choi countered that the slush fund had never flowed into SK Group, which was also confirmed during the 1995 investigation into Roh’s slush fund.

In addition, Roh claimed that the halo of “Former President’s son-in-law” played a major role in Chairman Choi’s rise to the head of the group, but Chairman Choi countered that he was disadvantaged as a “presidential in-laws company.”

The appeals court ruled that SK Group Chairman Choi Tae-won (63) should pay Noh So-young (63), director of the art center Navi, more than 1.3 trillion won in property division following divorce.

The amount is more than 20 times higher than 100 million won in alimony and 66.5 billion won in property division, which was recognized by the first trial in December 2022. In particular, property division is the largest ever known.

LAWTIMES

On the 30th, the Seoul High Court’s House Affairs Division 2 (Chief Judge Kim Si-cheol and Kim Ok-gon Lee Dong-hyun) ruled that “the plaintiff (Chairman Choi) should pay 2 billion won in alimony to the defendant (Director Roh) and 1.3808 trillion won in property division.”

The court said, “Chairman Choi spent more than 21.9 billion won on the part that can be calculated by maintaining his relationship with Kim Hee-young, chairman of the TNC Foundation, after separating from Director Roh, and provided economic benefits that cannot be calculated,” adding, “The amount of alimony for the first trial, which calculated the mental pain of the marriage breakdown, is too small.”

“Roh should be considered to have increased SK Group’s value or contributed to its management activities,” he said. “All of Chairman Choi’s assets are subject to division.” He reversed the judgment of the first trial that Choi’s stake in SK Corp. is not subject to division.

The court also added, “We believe that former President Roh Tae-woo served as a shield or shield for former Chairman Choi Jong-hyun and, as a result, provided intangible help to (SK Group’s) successful management activities.”

Based on the judgment, the court, which considered the two men’s total assets at about 4 trillion won, set the ratio of property division at 65% for Chairman Choi and 35% for Director Roh.

SK GROUP

The court asked Chairman Choi to pay more than 1 trillion won in cash to Director Roh.

The court also criticized Chairman Choi, saying, “Even though the marital relationship has not been resolved, we have suspended credit cards since February 2019 and stopped providing cash living expenses after the first trial ruling.”

The management of the company should not be kept stable due to the divorce of a couple and should not have a significant impact on others.

EJ SONG

US ASIA JOURNAL

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