Court corrects error in ruling of SK divorce case, making it enter new phase

Chey Tae-won, chairman of SK Group, and Roh Soh-yeong, director of the Butterfly Art Center. By Kwon Do-hyun

The appeals court that heard the divorce case of SK Group Chairman Chey Tae-won and director of Art Center Nabi Roh Soh-yeong corrected a numerical error in the calculation of the value of SK shares, but left the outcome of the trial, including the property division ratio, unchanged, causing Chey to strongly oppose it. Chey's complaint is that "it is incomprehensible that the percentage and amount of property division remains unchanged even though the error in the calculation of the stock value, which was the standard for property division, has been corrected and the contribution to the property has changed." The court issued an unusual documented explanation on June 18, saying, "It is not enough to change the result because it is a correction of the facts at an intermediate stage."

At the heart of the controversy is whether SK shares will be recognized as the subject of property division. Even if the property was inherited from the former president, Chey's role in increasing the value of the stocks was significant, and if his spouse's contribution was recognized, it would be "joint property" and should be shared with Roh.

The "numerical error in calculating the stock value," which the appeals court corrected the previous day, came up while examining the 280 million won Chey used to acquire the stocks of Korea Telecom, the predecessor of SK C&C, in 1994. Unlike the first trial, the appeals court judged that it was not clearly proven that Chey bought the SK shares solely with the money of the late Chairman Chey Jong-hyun, based on account transactions under Chairman Choi's name. Therefore, the court did not accept Chey's claim that the source of funds for the SK stocks, valued at 3 trillion won, were "special property" that he inherited or received as a gift.

The court went a step further and found that Chey's contribution was significant based on the stock value. Calculating the value of the stocks at 100 won per share in May 1998, the court said that he increased the value of the company 355 times as of November 2009.

However, Chey raised an objection that it should be viewed as 1,000 won, not 100 won per share, considering the division of the face value, and variables occurred as the court accepted and corrected it because Chey’s contribution was reduced by one-tenth, from 355 times to 35.6 times. Chey’s lawyers argued that his contribution was lower than that of the former chairman (125 times), and that he was not a "self-made" but a "successor with inheritance," and therefore did not need to split the stocks Roh.

In response, the appeals court judged that the arbitrary distinction between the self-made and the successor with inheritance was unfounded, and that Chey was more of a self-made person, at least since 1998, when the former chairman died. The court said, "Including his tenure until this year, the value of the company has increased by about 160 times, compared to 125 times of the former chairman.“

Chey's defense argued that the result should also be changed according to the correction of the numerical error. "Before the error was corrected, Chey’s contribution was judged to be 355 times and then changed to 160 times, so it is questionable why it does not affect the outcome of the ruling," said Chey’s lawyers.

The appeals court reiterated, "The correction of the numerical error was a correction of the facts at an “intermediate stage” of Chey’s management activity, which is not a basis for shaking the outcome of the trial." As the chairman continues to be active in management, the court said his contribution should be calculated after considering all 26 years of his tenure until this year. It said that this did not change the essence of its decision not to consider the funds, which were the source of SK stocks held by Chey, as special property.

While the appeal court said that the correction of the numerical error "does not affect the result," Chey’s defense has been protesting it, calling it a "fatal error.”

There are often “rectification and decision” that correct errors in judgment. In some cases, it is done ex officio of the court without filing an application or raising a problem by a party involved. If the error is serious enough to affect the result, it is a reason for remand after reversal.

The rectified decision of the appeal court will be treated at the Supreme Court. Some have pointed out that the Supreme Court may take issue with the error of a change in premise. Others believe that it may not have a significant impact on the final conclusion.

Lee Hyun-gon, a former family court judge, said, "The important thing is that former President Roh Tae-woo's slush funds flowed to SK’s former president and were used to fund the company's acquisition," adding, "I don't think it affects the calculation of the property subject to division."

Of course, Choi's side denies Roh Soh-yeong's claim that he received slush funds from her father.

Lee Dong-jin, a professor at Seoul National University's law school, said, "The 35 percent of the property division granted to Roh was calculated by combining various contributions, including the slush funds and her housework," adding, "It is questionable whether the final result will be change because even if there is a calculation error, the core of not seeing Chey's property as a special property has not changed."

※This article has undergone review by a professional translator after being translated by an AI translation tool.