SK Group chairman Chey Tae-won ordered to pay $640 million in divorce settlement

SEOUL – A South Korean court on Friday ordered SK Group Chairman Chey Tae-won to pay 944 billion won ($640 million) to his former spouse, Roh Soh-yeong, in a high-profile divorce case that has drawn attention to the billionaire’s stake in the country’s second-largest conglomerate and its growing role in the artificial intelligence (AI) industry.

The cash award is the largest divorce settlement ever recorded in South Korea, although it is significantly lower than the 1.38 trillion won settlement previously ordered by an appeals court in 2024.

Analysts and fund managers said Chey may need to sell shares in SK Group affiliates or use them as collateral to raise funds for the payment. However, they said the ruling is unlikely to affect his control over the conglomerate.

“This likely won’t affect management control of SK Group,” said Park Ju-gun, head of corporate analysis firm Leaders Index.

SK Group has gained global attention amid the rapid growth of artificial intelligence technology. Its chipmaking affiliate, SK Hynix, has become a major supplier of high-bandwidth memory (HBM) chips used in Nvidia’s AI processors, making the company one of the biggest beneficiaries of rising demand for advanced semiconductors.

“We apologize for causing concern and will decide whether to appeal after reviewing the court ruling,” said Lee Jae-keun, a lawyer representing Chey.

SK Group did not immediately comment on the court’s decision, while Roh’s legal team also declined to provide a statement.

Shares of SK Inc. fell 3.8% on Friday, while SK Hynix shares dropped 8.3% in Seoul trading.

The ruling followed a Supreme Court decision that overturned part of a lower court’s verdict in the divorce settlement case last year. The Supreme Court ruled that alleged funds provided to SK Group by Roh’s father, former South Korean President Roh Tae-woo, could not be considered a legally protected contribution to the company.

The divorce itself and a separate 2 billion won ($1.36 million) damages payment had already been finalized.

Chey is not a direct shareholder of SK Hynix. However, he is the largest shareholder of SK Inc., which owns a 32% stake in SK Square, the largest shareholder of SK Hynix. Forbes estimates Chey’s wealth at $5.4 billion.

Investor focus on SK Inc. stake

The case has increased investor attention on Chey’s 17.9% stake in SK Inc., the holding company of SK Group, and whether the large cash payment could force him to raise funds through borrowing, asset sales, or share pledges.

The court ruled that Chey’s SK Inc. shares and other assets remain subject to division because they were acquired during the marriage and both parties contributed to their creation, maintenance, and increase in value.

It said Roh’s contributions included raising their children, managing household responsibilities, and participating in external activities connected to SK Group.

The court also ruled that alleged financial support from Roh’s father should not be included in determining the division of assets, following the Supreme Court’s earlier decision.

The Seoul High Court said Chey’s shareholdings would be valued based on their worth on April 16, 2024, when the original appeals court completed fact-finding in the divorce case.

Although Chey’s holdings increased significantly after that date, the court said the rise did not justify using a later valuation date. Instead, the increase was considered when determining each party’s share of the marital assets.

The court set the property division ratio at one-third for Roh and two-thirds for Chey, reducing Roh’s share from the 35% awarded by the appeals court in 2024.

It also allowed Chey to retain ownership of his shares and ordered him to settle the payment in cash, citing the importance of the shares in maintaining management control of SK Group.

The case could return to the Supreme Court if either side challenges the Seoul High Court’s ruling.

($1 = 1,466.1000 won)

-Reporting by Joyce Lee, Kyu-seok Shim and Heejin Kim; Editing by Ed Davies and Clarence Fernandez/Reuters