Seoul: A South Korean billionaire’s record divorce settlement is fuelling a counterintuitive rally in his firm’s stock, with speculators betting he’ll take steps to boost its value to pay his estranged wife.
SK Inc, the holding company behind South Korea’s second-biggest conglomerate, surged the most since January yesterday after a court ordered its chairman to pay the country’s biggest known divorce settlement.
The Seoul High Court told Chey Tae-won to pay 1.38 trillion won in property division and two billion won in alimony to Roh Soh-yeong, according to a text message from the court. That’s more than the 66.5 billion won and 100 million won in alimony a lower court had ruled in 2022, though less than what Roh had requested.
Chey will appeal the ruling, SK said in an emailed statement.
The high-profile divorce has attracted public attention as Chey holds a 17.7% stake in SK Inc, the holding company of SK Group.
The conglomerate’s businesses include one of the world’s biggest memory-chip firms, SK Hynix Inc, electric vehicle battery maker SK On Co and South Korea’s largest mobile carrier, SK Telecom Co. Chey might try to boost SK Inc’s stock price as the court ordered him to pay in cash, according to Roh Jongwon, chief investment officer at Infinity Global Asset Management in Seoul.
“There are expectations that SK would take action to boost the share price,” said Roh, who’s not related to Chey’s ex-wife. The stock jumped as much as 16% before closing 9.3% higher in Seoul.
Chey, worth an estimated US$2.3bil as per the Bloomberg Billionaires Index, met Roh, the daughter of former President Roh Tae-woo, while studying at the University of Chicago. They married in 1988 and had a son and two daughters together.
In 2015, Chey revealed he had a child with another woman, and two years later, he sought a divorce settlement mediated by a court.
As the couple failed to reach an agreement, the case went back to court. Roh filed a lawsuit in 2019 demanding 42.3% of Chey’s stake in SK Inc, worth about one trillion won at that time, and 300 million won in alimony. She later modified her claim to about two trillion won in cash and three billion won in alimony, the local media reported.
In 2022, the Seoul Family Court excluded Chey’s SK Inc shares from the division awarded, viewing them as “peculiar property” received by inheritance or gift before marriage, Yonhap News reported at the time. The court said then that it was difficult to determine whether Roh made a substantial contribution to Chey’s ownership.
In an interview with the Law Times weeks later, Roh said she didn’t expect the initial ruling would value her input during the 34-year marriage at less than 1.2% of Chey’s nearly five trillion won worth of assets.
The appeal court said in the new ruling that Chey’s SK Inc shares are joint property and are subject to wealth division, given how long the couple was married and how their fortune was built. That’s reflected in the increased settlement, as well as Roh’s mental pain, the court said.
Chey has led SK Group since the 1998 death of his father, Chey Jong-hyon, the brother of the late founder.
Under him, SK Group overtook Hyundai Motor Group to become the country’s second-largest conglomerate, with 334 trillion won in assets this year, just behind Samsung Group, according to data compiled by the Korea Fair Trade Commission.
