2024.06.17. The Fair Economy — The camp of SK Group Chairman Choi Tae-won announced on the 17th that it will appeal to the Supreme Court against a divorce ruling ordering property division of 1.38 trillion won ($960 million) in his case with Roh So-yeong, director of Art Center Nabi.
His side also claimed that a critical error was found in the "stock valuation" calculation that affected the property division ruling in the case.
Choi's side had previously objected to the court's finding that acknowledged "the inflow of 30 billion won (about $21.6 million) in slush funds from the Sixth Republic," but this is the first time they have raised the issue of errors in the specific contents of the ruling.
Lee Dong-geun, a lawyer at law firm Hwawoo representing Choi, held a briefing at SK Seorin Building in Jongno-gu, Seoul, on the same day, arguing that the appellate court made a serious error in valuing the Daehan Telecom shares that Choi acquired in 1994.
The core of the argument is that the erroneous stock valuation, which was the main issue in the ruling, led to an extreme overestimation of Roh So-yeong's contribution as a supportive spouse.
"Based on this error, the appellate court ruled that SK shares were jointly held marital property and determined the division ratio on that basis," Lee said.
Daehan Telecom (now SK C&C) is the founding company that forms the basis of SK, which currently sits atop SK Group's governance structure. This is why the valuation of Daehan Telecom shares is fundamental to assessing SK's current value.
Late Chairman Choi Jong-hyeon gave his eldest son, Choi Tae-won, about 280 million won (about $200,000) in 1994 so that he could acquire Daehan Telecom shares. With that money, Choi purchased 700,000 shares of Daehan Telecom—which was then running a cumulative deficit of several billion won or more—at 400 won per share that November. Daehan Telecom, which changed its name to SK C&C in 1998, saw its share price reduced to one-fiftieth of its original face value after two subsequent stock splits.
On this point, accountant Han Sang-dal of Cheonghyeon Accounting Corporation said that day, "Considering the two stock splits, the value of Daehan Telecom shares in May 1998 should have been 1,000 won per share, not 100 won."
In fact, the court compared the increase in value from 1994 until the late chairman's death in 1998 with the increase from that time until SK C&C's listing in 2009. Based on this flawed result, it determined the late chairman's contribution to the company's growth at 12.5 times and Chairman Choi's contribution at 355 times.
On this basis, the court assumed that Chairman Choi Tae-won's degree of contribution was far greater than that of the late chairman. It recognized the contribution of Director Roh So-yeong, who supported Chairman Choi, and set the property division ratio at 65 to 35, ruling for a property division of approximately 1.38 trillion won ($960 million). Although the court also addressed other contributions claimed by Director Roh's side, it effectively viewed the growth in SK share value as the largest component in the property division.
However, correcting the calculation error underlying the court's decision would completely change the situation, according to Choi's legal representative. As Choi's side argues, the late chairman's contribution, originally calculated at 12.5 times, would increase tenfold to 125 times, while Choi's contribution, calculated at 355 times, would decrease to 35.5 times.
Lee said, "The appellate court, based on the erroneous figures, undervalued the portion Choi inherited through succession and effectively concluded that Choi was a 'self-made entrepreneur' who built the company himself. Furthermore, since the court decided on this basis that SK shares were subject to division and took this into account in calculating the division ratio, the conclusion needs to be redrawn after correcting this critical error."
In other words, since there is a flaw in the most basic figure underlying the property division ruling, the logical chain—from the calculation error, to the erroneous valuation of contributions, to the conclusion that Choi was a self-made entrepreneur, to the determination that SK shares were joint marital property, to the finalized property division ratio—needs to be reexamined.
Lee said, "Along with this serious error, we will appeal to the Supreme Court to seek a new legal judgment on several issues, including the controversy over the Sixth Republic's tangible and intangible contributions."
In particular, he said, "It goes without saying that the court's decision should be respected. However, we intend to use the appeal to correct the objective errors and the judgments based on mistaken factual findings that appeared in the appellate ruling. Beyond that, the appellate court directly disclosed its findings on important issues such as whether the Sixth Republic made contributions, and the divorce ruling—which contains real names and is highly prone to misunderstanding—has been indiscriminately leaked and posted online. As a result, matters that have not been finalized are being treated as established fact, causing serious harm, so we had no choice but to make Choi's side's position public."
Earlier, Lee Hyeong-hui, chairman of SK SUPEX Council's Communications Committee, said, "This ruling accepted unproven claims at face value and severely damaged SK's history and value. We will correct this to restore the company's honor and our employees' pride."
An SK Group official said, "Our top priority is restoring the honor of SK and its employees, and we will do everything necessary to correct the distorted facts. Of course, we also plan to make every effort to enhance corporate and shareholder value through our core business activities, such as continuous technology development and expansion into global markets."
0 Comments
No comments yet.