The Supreme Court on the 16th overturned the appellate ruling in the final appeal of the divorce suit between SK Group Chairman Chey Tae-won and Art Center Nabi Director Noh So-young that had ordered, "Chairman Chey must pay Director Noh 1.3808 trillion won as property division." The gist was that the appellate court erred in finding that 30 billion won in slush funds belonging to the late former President Roh Tae-woo, Noh's father, contributed to the couple's asset formation.
However, the appellate ruling that Chey must pay Noh 2 billion won in alimony was finalized that day. It came 8 years and 3 months after Chey applied for divorce mediation in Jul. 2017, and 1 year and 5 months after the appellate ruling in May last year.
The Supreme Court's First Division (Presiding Justice Seo Kyung-hwan) sent the case back to the Seoul High Court in the ruling delivered at 10 a.m., stating, "We remand the portion of the appellate judgment concerning Director Noh's claim for property division."
Earlier, the trial court said Chey could pay Noh 65.5 billion won as property division, but the appellate court held he must pay 1.38 trillion won. The appellate court recognized that 30 billion won in slush funds of former President Roh Tae-woo had flowed to Chey's late father, the late Senior Chairman Choi Jong-hyun. It then found that because Noh contributed to Chey's asset formation, SK shares held by Chey were also subject to property division.
However, the Supreme Court said, "Even if we assume that around 30 billion won was provided by former President Roh to the late Senior Chairman Choi Jong-hyun around 1991, the source of the money appears to be bribes Roh received while in office," adding, "Because Roh's slush funds were illegal and not worthy of protection, they must not be considered as Noh's contribution in the property division."
The Supreme Court, however, rejected Chey's appeal, saying there was no error in the appellate ruling on Noh's alimony claim. Accordingly, the part ordering Chey to pay Noh 2 billion won in alimony, as held by the appellate court, was finalized. This alimony was paid in Aug. last year by Chey's partner, Kim Hee-young, a director at the T&C Foundation.
◇ The "marriage of the century" between a political family and a business family becomes the "divorce of the century"
Chey and Noh married in 1988. Their divorce litigation began in 2015 when Chey disclosed the existence of a mistress and a child born out of wedlock through a letter to a media outlet. Chey applied for divorce mediation for a consensual divorce against Noh in Jul. 2017, but after mediation failed, he filed for divorce in Feb. 2018. Noh initially refused to divorce and in Dec. 2019 filed a countersuit seeking property division. Noh sought 300 million won in alimony and property division of half of the SK Co. shares held by Chey.
In Dec. 2022, the trial court granted Noh's divorce claim and ruled, "Chey shall pay Noh 66.5 billion won as property division and 100 million won as alimony." However, it found that Chey's SK Co. shares were not subject to property division. In effect, it sided with Chey.
The trial bench viewed the SK Co. shares as "separate property" formed through a gift from Chey's late father, Chairman Choi Jong-hyun. Separate property refers to property one spouse owned before marriage or acquired in one's name through inheritance or gift during marriage. As a rule, separate property is not subject to property division upon divorce. Both sides appealed the first-instance ruling. In the appellate court, Noh changed the form of property division to 2 trillion won in cash and increased the alimony claim to 3 billion won.
The appellate court reversed course. In May last year, it ruled, "Chey shall pay Noh 1.3808 trillion won as property division and 2 billion won as alimony." Recognizing that Noh had substantially contributed to SK's growth, it deemed Chey's SK Co. shares subject to property division. Both property division and alimony were about 20 times higher than in the trial court, the largest amounts in the history of divorce litigation in Korea.
The appellate bench accepted the claim that 30 billion won, presumed to be slush funds of Noh's father, former President Roh Tae-woo, went to the late Senior Chairman Choi Jong-hyun of SK Group, and that this became seed money for the Sunkyong (SK) Group. The basis was the "Sunkyong 30 billion" memo by Noh's mother, Kim Ok-suk, which Noh disclosed for the first time on appeal, and six promissory notes worth 5 billion won each. Noh accepted the appellate ruling and said she would not appeal, but Chey appealed, contesting the decision.
In the process, controversy arose after the appellate ruling over the calculation of contribution due to an error in the stock price calculation. The appellate bench initially misstated the value of a Daehan Telecom share as 100 won in the judgment and then corrected it to 1,000 won (a correction of an error in the judgment). As a result, the late senior chairman Choi's contribution to the company's value increase changed from 12.5 times to 125 times, and Chey's contribution changed from 355 times to 35.6 times. Chey's side argued that the judgment contained "a fatal error" and that the ruling should change because the contribution ratios to the stock price increase had changed.