SK Group chairman's $1 billion divorce suit to affect conglomerate's governance

Seoul, June 2 (IANS) The “most expensive divorce suit” in South Korea’s history between SK Group’s Chairman Chey Tae-won and his estranged wife, Roh So-young, is feared to affect Chey’s grip on SK Group’s governance as questions arise over how he can pay such a huge alimony.
Last week, an appellate court ordered Chey to pay 1.38 trillion won ($1 billion) in property division to Roh, the only daughter of former President Roh Tae-woo.
The couple married in 1988 and have three children.
While the Supreme Court’s ruling is still pending, experts are concerned that if the ordered amount is divided as the appellate court ruled, it could shake up the governance of SK Group, the second-largest conglomerate in Korea, reports Yonhap news agency.
The court ruled that Chey’s SK shares were subject to division and recognized late President Roh’s slush fund worth 30 billion won and contributions to SK Group’s increased value and business activities.
The combined property of Chey and Roh was determined to be 4 trillion won, with a division rate of 65 percent for Chey and 35 percent for Roh. The court ordered Chey to pay the divided sum in cash.
Some speculate that Chey might need to sell his shares in SK Inc., the holding company of SK Group, which includes SK Telecom, SK Innovation Co. and SK Square, to meet the payment.
Chey is the largest shareholder of SK, holding 17.73 per cent, worth 2.2 trillion won, through which he controls other SK Group affiliates.
However, insiders believe Chey is unlikely to sell his stake in SK due to the governance structure and the importance of his shares within the group.
Instead, Chey is expected to raise part of the funds through cash and real estate sales, with the remainder coming from the sale of a stake in the privately held SK Siltron Co. and loans.
The Supreme Court decision could take two to three years, as Chey has announced his intention to appeal, giving him more time to arrange the amount of the division.
–IANS
na/