The nearly decade-long "divorce of the century" between SK Group Chairman Chey Tae-won and his ex-wife, Roh Sook-young (daughter of former President Roh Tae-woo), has reached a new verdict. The court has ordered Chey Tae-won to pay a cash settlement of 9440 billion won (approximately $644 million or 4.37 billion yuan) to his former spouse. This historic ruling has immediately drawn intense global market attention to SK Group and its core semiconductor giant, SK Hynix (SKHY.US).
Following the news, SK Hynix's local shares in South Korea fell 6.83% to 1,788,000 won. The broader KOSPI index also dropped 6%, triggering a Sidecar mechanism that halted sell orders, and SK Hynix's intraday losses widened to as much as 7.7%. However, after the initial panic subsided, market expectations suggest the ruling's substantive impact on SK Hynix's stock price is limited, with the company's leading position in AI chips remaining the core driver of its valuation.
Control Solidified: Cash Settlement Averts "Split Crisis"
On July 24 at 2 PM, the Family Division 1 of the Seoul High Court ruled that the SK Inc. shares held by Chey Tae-won are marital property and must be divided, giving Roh Sook-young a one-third share. However, the court chose the valuation date as the closing of the second trial arguments in April 2024, when SK Inc. shares were trading at around 160,000 won, rather than the current market price of over 800,000 won. This reduced the settlement amount from 1.38 trillion won in the second trial to 9440 billion won.
Notably, the court explicitly excluded the alleged "300 billion won in illegal funds" from former President Roh Tae-woo from contributing to SK's growth and mandated payment in cash rather than stock. Chey Tae-won's side immediately stated they would "carefully review the ruling before deciding whether to appeal," suggesting the nine-year legal battle may still proceed to the Supreme Court. By adopting a cash compensation method, the court allowed Chey Tae-won to retain his shares while compensating Roh Sook-young for her share in cash, aiming to maintain management control and corporate governance stability.
Capital markets had previously been most concerned about "control dilution." During earlier arguments, there was intense debate over whether Chey Tae-won's shares in SK Group's holding company, SK Inc., should be directly split as marital property. If the court had ordered a physical division of shares, Chey Tae-won's stake in SK Inc. would have been significantly weakened, potentially allowing activist investors to intervene and destabilize SK Group's overall management. The court's final decision to settle in cash is a major positive for SK Hynix.
Looking at historical trends, on the day of the 1.38 trillion won second trial ruling in May 2024, SK Group and SK Hynix shares both fell 2%-3% intraday, but market panic was absorbed within weeks. With the latest ruling being about 32% lower than the second trial and requiring cash payment, the SK equity structure remains unchanged, further reducing control risk. On July 24, the KOSPI index plunged over 4%, with SK Hynix falling more than 5% and Samsung Electronics also dropping over 3.6%. However, market participants widely believe that the sharp decline in Korean stocks that day was a systemic risk release, with limited connection to the divorce ruling. In fact, the previous trading day (July 23), SK Hynix's ADRs in the U.S. rose over 7% intraday and closed up 5.79%, showing that international investors had already priced in the verdict.
Pledges and Dividends May Replace Selling Pressure
While directly transferring shares was avoided, the cash payment pressure of 9440 billion won remains significant. The market is focused on how Chey Tae-won will raise this vast sum and whether it will trigger secondary market selling pressure on related stocks. From a capital operation perspective, Chey Tae-won may take the following paths: First, stock pledge financing, where he is more likely to pledge his SK Inc. shares for loans rather than directly selling them, thus protecting the stock price and maintaining control. Second, pushing for higher dividends from the holding company and core subsidiaries, meaning the holding company and profitable giant SK Hynix may increase dividend payout ratios to repay loan interest and installments. This "funding through dividends" demand could actually support long-term investors seeking stable cash flows. Third, an isolation effect is clear, as SK Group's control over SK Hynix is mainly indirect through SK Inc. Even if there is a minimal chance of asset liquidation, the primary impact would be on the holding company level, with very limited selling pressure on SK Hynix shares.
Analyst Views: From "Control Panic" to "Bad News Priced In"
Even before the latest ruling, the interpretation of the case in Korean capital markets had shifted significantly, from an early "control crisis" to "uncertainty removal." Park Ju-gun, head of the Seoul-based corporate research institute Leaders Index, noted, "SK Group's overall market capitalization has surged due to the AI boom, and a 9440 billion won settlement is unlikely to seriously impact Chey Tae-won's control over the group." Chey Tae-won's current net worth is about $5.6 billion, having doubled over the past year due to SK Hynix's share price surge; the 9440 billion won settlement represents only about 11.5% of his wealth, making the payment pressure relatively manageable.
Analyst Park Se-yeon from Hanwha Investment & Securities previously analyzed the possibility of a Supreme Court remand, stating that if the amount decreased after a retrial, "uncertainty over SK shares would be removed, and the likelihood of shareholder value enhancement policies like share buybacks and cancellations would increase." Conversely, if the high amount were upheld, "to cover interest costs and ensure liquidity, SK might significantly strengthen its dividend policy, drawing market attention to SK and SK preferred shares."
The securities industry is more focused on Chey Tae-won's fundraising path. According to South Korean media reports, Chey Tae-won currently holds 17.9% of SK Inc. shares, of which about 59.2% (7.67 million shares) have been pledged as collateral for loans totaling about 411.5 billion won. Analysts generally believe Chey Tae-won is more likely to raise funds through additional stock pledge loans rather than directly selling shares. A securities industry insider commented, "If Chey Tae-won increases his pledge scale, SK will make every effort to defend the stock price against the risk of additional margin calls and forced liquidation, which could actually become a supporting factor for the stock price."
Diminishing Litigation Risk
Overall, the impact of the 9440 billion won ruling on SK Hynix's stock price is characterized by "short-term emotional disturbance, medium-term neutral digestion, and long-term irrelevance to fundamentals." The sharp drop in Korean stocks today was more driven by systematic market adjustments, while the divorce case itself has been fully priced in by the market. The core variables determining SK Hynix's medium-to-long-term valuation remain: the production ramp-up progress of HBM3E and next-generation HBM4, supply agreements with AI chip giants like NVIDIA, and the upcoming quarterly earnings report scheduled for July 29. In the context of the global AI computing power race intensifying, SK Hynix, as the global leader in high-bandwidth memory (HBM), has a technological moat and profit outlook far beyond the influence of its controlling shareholder's personal financial arrangements. For investors, the end of this "divorce of the century" may feel like a well-rehearsed play—much ado about nothing.
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