Chey Tae-won SK(034730) Group chairman and Roh Soh-yeong, head of Art Center Nabi, will receive a ruling in their "property division of the century" remand trial at the Seoul High Court on the 24th.
The biggest question is whether Chairman Chey's SK Co. equity is included in the property division and, if so, which date's share price is used to calculate its value. Debate is intensifying over whether it is appropriate to reflect gains in the share price that occurred after the divorce was finalized.
◇Do they have to split shares that rose after the divorce?
According to legal sources on the 16th, the Seoul High Court's family division 1 (Presiding Judge Lee Sang-ju) will hold the sentencing hearing for the remand trial on property division for Chairman Chey and Director Roh at 2 p.m. on the 24th. At the final hearing on June 26, both Chey and Roh appeared in person and delivered their closing views to the bench.
The case is drawing attention overseas as well. Reuters reported on the 10th, alongside news of SK hynix's U.S. ADR listing, that "Chairman Chey is pursuing a property division lawsuit worth hundreds of millions of dollars, and the case could affect the governance structure of SK Group, Korea's No. 2 conglomerate."
Even on the day SK hynix secured about 4 trillion won in investment through a U.S. market listing and Chey outlined plans in the U.S. to expand AI and semiconductor businesses, uncertainty over the group's governance structure was raised.
Behind this is the recent surge in SK Co.'s share price. Roh's side is said to argue that assets should be valued based on the June 26 closing price of 815,000 won, the day the remand trial arguments concluded.
By contrast, Chey's side is reported to claim that the price on Apr. 16, 2024—149,500 won, the day arguments closed in the trial court phase of the divorce lawsuit—should be the benchmark. The two prices differ by 5.45 times. Depending on which reference date is applied, the valuation of assets subject to partitioning changes significantly and could affect Chey's burden in disposing of equity or raising funds.
The issue is whether gains in the share price that occurred after the legal divorce was finalized must be shared with the former spouse. SK Co.'s share price has recently corrected but remains much higher than in 2024. Observers say the rise reflects the spread of AI, SK hynix's boom in high-bandwidth memory (HBM), and group-wide expansion of AI investments.
Chey applied for divorce mediation in 2017, and Roh filed a countersuit in 2019 seeking divorce and property division. After a first-instance ruling in Dec. 2022 and a second-instance ruling in May 2024, the Supreme Court confirmed the divorce in Oct. last year. Currently, only the property division portion is being reheard at the Seoul High Court.
Supreme Court precedent typically uses the date arguments close in the trial court phase of a divorce case as the reference point for property division. This fixes asset values before the divorce ruling and prevents the judgment from being heavily swayed by subsequent market fluctuations.
Accordingly, some argue that Apr. 16, 2024, should be the reference date in this case. Others counter that because the remand trial is reassessing the property division portion, it can use the date arguments close in the current proceedings.
◇Chairman Chey: "The marriage broke down in 2006"; Director Roh: "We separated in 2011"
When the marriage effectively broke down is also a key issue. Chey's side has argued that the marriage had been irreparable since 2006 and that they began living apart at the end of 2009. Roh's side has also said they used separate rooms from 2009 and have lived apart since 2011.
The two married in 1988, making the legal duration of their marriage 37 years, but they have effectively not lived as a couple for about 15 years. The key question is whether share price gains formed by Chey's management activities and SK Group's AI and semiconductor business growth after they began living apart can be seen as the result of joint contributions during the marriage.
Roh's claimed contributions in housework and child-rearing are also at issue. However, given that their three children studied abroad from their teenage years, some say it is difficult to assess child-rearing contributions in the same way as in typical households.
◇Looking at precedent... "Exclude asset changes after the marriage breakdown"
The Supreme Court appears to have consistently maintained the principle that "asset changes due to subsequent circumstances are not reflected in property division." The idea is that gains from asset growth arising from one spouse's independent efforts or new economic conditions after the marital breakdown cannot be shared with the other.
Accordingly, Roh's side will likely need to specifically prove that housework and spousal support before the marriage breakdown substantially contributed to the acquisition and growth of SK hynix and, further, to the increase in the value of SK Co. equity from the AI boom.
In fact, in a 2002 divorce property division case, the Supreme Court held that when the timing of retirement and the amount of severance pay are not fixed, future severance pay cannot be subject to property division.
In 2013, it also held that if asset changes after the marital breakdown are due to subsequent circumstances attributable only to one spouse and unrelated to the property relations formed during the marriage, they should be excluded from division.
In 2024, it ruled that even if debt decreased due to one spouse's efforts after the marital breakdown, it is not the result of the couple's joint efforts and thus cannot be retroactively reflected to the reference time for property division.
A legal source said, "The key issue will be how much Director Roh contributed during the marriage to the rise in the value of SK Co. equity driven by SK hynix and SK Group's AI business growth," adding, "It is questionable whether our society can accept reflecting increases in corporate value and share prices that occurred after the marital breakdown in the property division merely because the litigation was prolonged."