SK Group Chairman Chey Tae-won (left) and Noh So-young, director of Art Center Nabi. [Yonhap]
SK Group Chairman Chey Tae-won (left) and Noh So-young, director of Art Center Nabi. [Yonhap]

SK Group Chairman Chey Tae-won proposed paying part of the 944 billion won ($667 million) asset-division settlement to Noh So-young, director of Art Center Nabi, in shares rather than cash — but Noh's side rejected the offer, insisting on full cash payment, sources said. The dispute over payment method is seen as one of the key reasons Chey's legal team filed a last-minute appeal against the retrial ruling on the asset division.

According to legal sources, Chey's side had initially considered accepting the retrial ruling issued July 24 as it stood, with a strong desire to bring the litigation — which has dragged on for more than nine years — to a close.

That plan ran into difficulty, however, as Chey faced the challenge of raising 944 billion won in cash within roughly three weeks before the appeal deadline on Friday.

Chey explored selling some of his SK shares, but was reportedly concerned about the impact a large, rapid disposal of shares by the group's controlling shareholder could have on the share price and SK's ownership structure.

Chey's side then proposed paying the asset-division sum in a combination of cash and shares.

Under the terms put forward, Chey's side would make up the difference if the share price fell, but would not seek to reclaim any gains if it rose.

Noh's side, however, said it would accept nothing less than full cash payment as stipulated in the retrial ruling.

With negotiations deadlocked, Chey's legal representatives announced the appeal at 11:59 p.m. Friday — one minute before the filing deadline.

By filing the appeal and delaying finalization of the ruling, Chey's side has for now avoided the obligation to pay delay interest — set at 5 percent per year from the day after the ruling is finalized, amounting to about 130 million won a day — and has bought additional time to work out a payment method, including how to raise the cash.

The appeal itself, however, is expected to come at considerable cost. Legal experts estimate that court filing fees alone could run into the tens of billions of won if Chey contests the full 944 billion won award.

In the appeal, Chey's side is expected to argue that the retrial court misapplied the law in calculating the asset-division ratio and the total amount.

The retrial court set April 16, 2024 — the date proceedings closed at the appellate court, which served as the court of fact in the divorce case — as the reference point for valuing Chey's SK shares.

The court rejected Noh's argument that June 26 — the date proceedings closed at the retrial court — should be used instead, but it did factor into the asset-division ratio the more than fivefold surge in SK's share price, from 160,000 won to 858,000 won, between the two dates. The court recognized that Noh had contributed in part to SK Group's growth and rise in corporate value.

The resulting asset-division ratio was set at 33.3 percent for Noh and 66.6 percent for Chey — only about 1.7 percentage points below the 35 percent share the appellate court had awarded Noh.

Chey's side, however, is expected to argue that incorporating post-reference-date share price movements into the division ratio is contradictory. His legal team is also likely to highlight that SK's share price has since fallen more than 30 percent from its level at the close of retrial proceedings, dropping to around 500,000 won.


keg@heraldcorp.com