SEOUL, The billion-dollar divorce case between SK Group Chairman Chey Tae-won and his wife, Roh Soh-yeong, has entered a new phase, as an appeals court corrected a rare error in its verdict this week at Chey’s request.
Chey, who was ordered by the Seoul High Court last month to pay 1.38 trillion won (US$1 billion) in property division to Roh, called a news conference Monday to say the court had mistakenly inflated his contribution to the growth of the now-defunct SK CANDC, the parent company of the group’s current holding company, SK Inc.
Chey said the appeals court committed a grave mistake by setting the value of one share of Daehan Telecom, the predecessor of SK CANDC, at 100 won, instead of the correct figure of 1,000 won, as of 1998, when Chey’s father and SK founder Chey Jong-hyun died and the junior Chey took over the group’s control.
Due to the calculation error, the court underestimated the contribution of the elder Chey in forming the value of SK CANDC by 1/10 and overrated the younger Chey’s con
tribution by 10 times, leading to a “100-fold distortion” in the property division figure, according to the group and its lawyers.
As a result, the couple’s common wealth, including Roh’s share of contributions to the company’s growth, was overcalculated, they said, arguing that SK Inc. stocks should be excluded from the property division, as they are considered to be “inherited assets” rather than “self-made assets.”
Chey used an inheritance of 280 million won from his father to buy 700,000 shares of Daehan Telecom, which was in negative equity, at 400 won per share in November 1994. Daehan Telecom, in which Chey had held a 49 percent stake, changed its name to SK CANDC in December 1998.
The Seoul High Court immediately admitted the mistake in its calculation and revised the written verdict to value the share of Daehan Telecom at 1,000 won, reducing the chairman’s contributions. Thus, the levels of contribution to the company’s 4,456-fold growth over a period of 15 years also changed. Initially, the court
estimated the contributions of the son and the father at 355 times and 12.5 times, respectively. Following the revision, however, their contributions will be changed to 35.5 times and 125 times, respectively.
Accordingly, the outlook for the Supreme Court’s final ruling on the divorce case has become much more complicated, as Chey’s lawyers vowed a fierce legal battle in the remaining court proceedings.
In the first place, the top court will decide whether the revision of the written verdict by the Seoul High Court was legal. If the revision is deemed legal, the top court will examine whether the amount of property division is appropriate based on the revised figure. Then it will decide whether to send the case back to the high court for a retrial.
Responding to Chey’s claim, Roh’s lawyers said there has been an attempt to obstruct the judiciary’s decision by exaggerating the scale of the error, and the final decision is unlikely to be affected by the matter.
But most legal experts are taking a cautious w
ait-and-see approach to the case, while criticizing the appeals court for making the error, big or small, in the high-profile divorce case watched by the entire nation, thus undermining the trust in the judiciary.
The Seoul High Court released a statement on Tuesday, saying the error correction cannot affect the ratio and subject of property division. The court previously determined the combined property of Chey and Roh to be 4 trillion won, with a division rate of 65 percent for Chey and 35 percent for Roh.
The court said there was a miscalculation in the written verdict but it cannot affect the property division ratio and the base point for the division, which was set at SK Inc.’s stock price of 160,000 won as of April 16 this year.
SK Group said the share value of SK CANDC grew 125-fold from 8 won to 1,000 won during the 1994-98 chairmanship of the elder Chey, while it grew 35.5-fold from 1,000 won to 35,650 won under the younger Chey between 1998 and 2009, when the company was listed.
But the court re
futed the group’s claim that contributions of Chey and his father to the growth of SK CANDC should be changed to 35.5 times and 125 times, respectively. Instead, the court said their contributions should be set at 160 times and 125 times, respectively, adding the company’s share value of 35,650 won as of 2009 is not the base point for the property division.
The court said that despite the error correction, the property division ratio, as well as its judgment that Roh and her father, the late former President Roh Tae-woo, made intangible contributions to the growth of SK Group, will not be changed.
Source: Yonhap News Agency
