Succession plan in the works: SK Group Chairman Chey

SK Group Chairman Chey Tae-won

The chairman of South Korea’s second-largest conglomerate SK Group said in an interview with a foreign media outlet that he is considering a succession plan for the group.

“I‘m really thinking about it, and I need to be prepared for it (succession),” Chey Tae-won said in an interview with Bloomberg on Thursday. “If something happens to me, who will lead the whole group? I need a succession plan.”

But Chey added that it was not yet time to disclose his plan. He became the head of SK Group at the age of 39, succeeding his father Chey Jong-hyun, who passed away in 1998.

Chey’s eldest daughter, Chey Yoon-jung, is currently the head of strategic investment team and a member of the new drug development task force at SK biopharmaceuticals Co. His second daughter, Chey Min-jung, took a leave of absence from SK hynix Inc. after serving as a naval officer and is now an advisor to a telemedicine startup in the United States. Chey’s eldest son, Chey In-keun, works at PassKey Inc., a U.S.-based energy transition business entity of SK E&S Americas Inc.

Under the Korean tax system, inheriting shares of a holding company can lead to a hefty tax bill. The Inheritance Tax and Gift Tax Act mandates a tax rate of 50 percent for an inheritance exceeding 3 billion won ($2.24 million). An additional surcharge is applied to share inheritances of the largest shareholder and specially related parties, which is 30 percent if the stake of inherited shares is more than 50 percent and 20 percent if the stake is 50 percent or less. All of this means it would not be easy for Chey’s children to inherit the 17.5 percent of SK Corp. shares that he holds. Given the high inheritance burden, some also suggest that Chey’s succession plan could involve strengthening the board-centered management system. There is also speculation that the role of the SUPEX Council, the highest consultative panel within SK Group, could be reinforced to act as the group’s control tower.