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Court partially corrects errors in SK chairman’s divorce ruling, keeps settlement

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Seoul’s high court on Monday partially corrected the ruling in the divorce between SK Group Chairman Chey Tae-won and his estranged wife, Roh Soh-yeong, to reflect what was pointed out as a “critical error” by the chairman earlier in the day.

The court, however, maintained the final settlement amount at 1.3 trillion won ($942 million) as previously ruled.

The written judgement sent out to Chey and Roh on Monday has raised the share value of Daehan Telecom, the predecessor of the group’s holding company SK Inc., from 100 won to 1,000 won from May 1998, just before Chey’s father and former SK Chairman Chey Jong-hyun passed away.

SK Group Chairman Chey Tae-won bows in apology before the press on Monday in central Seoul. [YONHAP]
The correction also led to a significant increase in the credit given to the former Chairman Chey for the group’s growth from a 12-fold jump in the value of Daehan Telecom shares to 125-fold. Current Chairman Chey’s contribution, in return, shrank from 355-fold to 35-fold.

SK Group Chairman Chey earlier in the day made note of a “critical error” in the country’s most expensive divorce settlement that could jeopardize his control over Korea’s No. 2 conglomerate during the process of coming up with the money.

“Although the judiciary’s decision should be respected, I decided to appeal, firstly because there is a critical error in the division of property,” Chey said Monday to the press, making a surprise appearance at a briefing originally scheduled to be attended only by company executives.

“I thought I should at least come forward once in front of everybody to make a direct apology for causing concern due to my personal issues,” he said, making a deep bow of apology before the press.

SK Group claimed Monday that the court’s calculation of Roh’s contribution to the growth of the conglomerate was overestimated because it attributed much of the business growth to Chairman Chey while minimizing the role of his father.

A greater contribution to the group’s growth by the current chairman would translate to a higher share of his property for his wife on recognition of her assistance to his business activities.

“The appellate court underestimated the inheritance of Chairman Chey and hastily concluded that he is a self-made man,” said attorney Lee Dong-keun of Yoon&Yang representing the chairman during the Monday briefing.

“Based on that premise, the court decided to include SK Inc. shares [held by Chairman Chey] in the division of property. The previously mentioned error should be corrected.”

Chey is the largest shareholder of SK Inc. with a 17.7 percent share worth 2.2 trillion won.

Lee said the court’s valuation of Daehan Telecom shares at 100 won in 1998 doesn’t reflect the two stock splits conducted in 2007 and 2009, and the value should be corrected to 1,000 won. Under such a correction, Chairman Chey’s role in the group’s growth would be reduced significantly, trimming the amount of the settlement for Roh.

SK Group said there are additional aspects of the ruling that require further explanation, such as the 30 billion won slush fund given to the group by former President Roh Tae-woo, father of the chairman’s wife, which helped it grow into an oil-to-telecom business giant.

“More explanation is needed for the 30 billion won slush fund, such as when and where and how it was used. It needs to be proven by perhaps an additional process by the two sides,” said Lee Hyung-hee, president of SK Supex Council, the top decision-making body of the group.

Roh’s attorney, Lee Sang-won of the law firm Pyeong An, said in a statement Monday that he regrets SK’s “attempt to hinder the judiciary’s judgement,” while encouraging the group to release the full ruling and let the public reach a conclusion on the outcome.

“Most of all, it feels extremely inappropriate for SK Group to handle the issue when it is merely a personal lawsuit of Chairman Chey.”

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]