It will be decided on the 14th whether the divorce suit between Chey Tae-won, chairman of SK(034730) Group, and Roh Soh-yeong, director of Art Center Nabi, will head to the Supreme Court again. If neither side files a further appeal against the remand ruling on property division by that day, the Seoul High Court's decision ordering Chairman Chey to pay Director Roh 944 billion won will be finalized as is. If either side files a further appeal, the property division portion will again be reviewed by the Supreme Court.
According to legal sources on the 13th, the Seoul High Court's Family Division 1 on the 24th of last month ordered Chairman Chey to pay Director Roh 944 billion won as property division. That is 436.8 billion won less than the 1.3808 trillion won set in the pre-remand appellate ruling, but the finding that Chey's SK Corp. stock should be included in the property division remained unchanged.
On Oct. 16 last year, the Supreme Court overturned the property division portion of the appellate ruling and sent the case back to the Seoul High Court. The reasoning was that if the 30 billion won that the late President Roh Tae-woo's side believed flowed into SK was illicitly raised funds, it could not be evaluated as Director Roh's contribution to asset formation. The portion ordering Chairman Chey to pay Director Roh 2 billion won in consolation money was finalized at that time.
If the remand ruling is finalized as is, Chairman Chey must pay Director Roh 944 billion won. The ruling imposed 5% annual delay damages from the day after finalization until full payment. Based on 944 billion won, that is about 129.3 million won per day, or about 47.2 billion won per year.
Whether to file a further appeal is also tied to when the property division amount is concretely finalized. The right to claim property division arises upon divorce, but the actual amount and method are determined through agreement between the parties or by a court's judgment. Once the ruling is finalized, Director Roh can initiate compulsory execution on the property division amount, using the final judgment as an enforceable title.
So far, it has not been decided which side will file a further appeal. Because the remand court maintained that SK Corp. stock is subject to property division, if a further appeal is filed, talk has mainly centered on Chairman Chey's side raising legal issues again. However, a court of final appeal does not reexamine the facts from scratch; it reviews whether the lower court's ruling violated the law. If a further appeal is filed, the key will be what misinterpretation of legal principles or procedural illegality is advanced as grounds.
If the ruling is finalized, attention is expected to shift to how to raise the 944 billion won.
The first asset being discussed is the 29.39% equity in SK Siltron that Chairman Chey holds via a total return swap (TRS). SK Corp. on the 31st of last month signed a deal to sell its 70.6% stake in SK Siltron to Doosan for about 2.3 trillion won. Doosan said it plans to separately discuss acquiring the remaining 29.39% equity held by Chairman Chey's side.
If the transaction price between SK Corp. and Doosan is simply applied, the value of Chairman Chey's side's equity is calculated at about 957.5 billion won. That is similar in scale to the property division amount set on remand. However, the actual sale price of that equity would require separate negotiations, and taxes and the TRS settlement structure must also be considered. It is difficult to view the equity valuation as cash that Chairman Chey can secure immediately.
There is also talk of raising funds by using Chairman Chey's equity in SK Corp. as collateral. However, because this equity is tied to the group's governance structure, the burdens associated with creating collateral or taking on additional borrowing must be considered. Financing costs from large borrowings are also a variable.
If neither side files a further appeal by the 14th, the last remaining property division portion in the legal dispute between the two, which began with a divorce mediation application in 2017, will also be finalized. Conversely, if either side files a further appeal, the determination over the lawfulness of the 944 billion won property division amount and its calculation process will again go to the Supreme Court.