The nearly decade-long "divorce of the century" between SK Group Chairman Chey Tae-won and his ex-wife, Roh Soh-yeong (daughter of former South Korean President Roh Tae-woo), has reached a final ruling. The court ordered Chey to pay 944 billion won (approximately $644 million) in cash as a property settlement.
This astronomical verdict quickly drew global capital market attention to SK Group and its core semiconductor giant, SK Hynix (SKHY.US). Following the news, SK Hynix's domestic stock fell 6.83% to 1.788 million won. South Korea's KOSPI index dropped 6%, triggering a Sidecar mechanism that halted sell orders, with SK Hynix's intraday loss widening to 7.7% at one point.
But after the panic subsided, the market widely expects the ruling's substantive impact on SK Hynix's stock price to be limited, with the company's AI chip leadership remaining the core valuation variable.
Control Stability: Cash Split Crushes "Breakup Crisis"
The Family Division 1 of the Seoul High Court ruled on July 24 at 2 p.m., recognizing Chey Tae-won's SK Inc. shares as marital property and ordering a one-third division to Roh Soh-yeong. However, the court chose the valuation date as the closing of the second-instance arguments in April 2024 (when SK shares were around 160,000 won), rather than the current market price above 800,000 won, reducing the settlement amount from the second-instance's 1.38 trillion won to 944 billion won.
Notably, the court explicitly excluded former President Roh Tae-woo's alleged "30 billion won illegal funds" from contributing to SK's growth and required payment in cash rather than stock. Chey's side immediately stated they would "carefully review the ruling before deciding whether to appeal," indicating the nine-year litigation may still proceed to the Supreme Court's final judgment.
In the property division method, the court adopted a compensatory approach, where Chey retains the stock and compensates Roh's share difference in cash. This move aims to maintain management rights and ensure corporate governance stability.
The capital market's biggest concern about the case was "control dilution."
During prior litigation debates, both sides fiercely argued over whether Chey's SK Inc. shares should be directly divided as marital property. If the court had ordered a stock transfer, Chey's stake in SK Inc. would have been significantly diluted, potentially inviting activist investors and triggering a governance shakeup across SK Group.
However, the court's final decision to pay in cash is a major positive for SK Hynix.
Looking at historical trends, on the day of the second-instance ruling of 1.38 trillion won in May 2024, SK Group and SK Hynix fell 2%-3% intraday, but market panic was digested within weeks. This ruling reduces the amount by about 32% compared to the second instance, and the cash-only payment method means SK's equity structure won't change directly, further lowering control risk.
On July 24, the KOSPI index plunged over 4%, SK Hynix dropped over 5%, and Samsung Electronics (SSNLF) also fell over 3.6%. Yet, market participants widely believe the day's KOSPI crash was due to systemic risk release, with limited correlation to the divorce ruling. In fact, on the previous trading day (July 23), SK Hynix's ADR rose over 7% intraday, closing up 5.79%, showing international investors had already fully priced in the verdict.
Pledging or Dividends May Replace Selling Pressure
While avoiding a direct equity transfer, the 944 billion won cash payout pressure is still significant. The market is closely watching how Chey will raise this huge sum and whether it will trigger secondary market selling pressure on related stocks.
From a capital operations logic, Chey may take the following paths:
Equity Pledge Financing: Chey is more likely to pledge his SK Inc. shares for loans rather than directly selling in the secondary market, thus maximizing stock price protection and maintaining control.
Increase Dividends from Holdings and Core Subsidiaries: To service loan interest and installment payments, the holding company and profitable units like SK Hynix may raise dividend payout ratios. This "funding via dividends" approach could actually support long-term investors seeking stable cash flows.
Isolation Effect Evident: SK Group's control over SK Hynix is mainly indirect through SK Inc. Even in the unlikely event of asset liquidation, the primary impact would be on the holding company level, with extremely limited selling pressure on SK Hynix itself.
Analyst Views: From "Control Panic" to "Bad News Priced In"
Before this ruling, the interpretation of the case in South Korea's capital market had already shifted significantly from an early "control crisis" to "uncertainty removal."
Park Ju-gun, head of Seoul-based corporate research firm Leaders Index, noted: "SK Group's market cap has surged due to the AI boom, and the 944 billion won settlement is unlikely to seriously impact Chey's control over the group." Chey's current net worth is about $5.6 billion, doubling in the past year due to SK Hynix's soaring stock price, making the 944 billion won only about 11.5% of his wealth—a manageable payment pressure.
Hanwha Investment Securities analyst Park Se-yeon, previously analyzing the possibility of the Supreme Court remanding the case, said that if the amount decreased after retrial, "uncertainty over SK's stock would be resolved, making it more likely for SK to pursue shareholder value enhancement policies like share cancellations." Conversely, if a high amount was upheld, "to offset interest costs and secure liquidity, SK might significantly strengthen its dividend policy, drawing market attention to SK and its preferred shares."
The securities industry is more focused on Chey's funding path. According to South Korean media, Chey currently holds 17.9% of SK Inc., of which about 59.2% (7.67 million shares) are already pledged as collateral, with loans totaling about 411.5 billion won. Analysts generally believe Chey will likely raise funds through additional share pledges rather than direct sales. One industry source analyzed: "If Chey increases his pledge size, SK will fully defend its stock price to prevent additional margin calls and forced liquidation risks, which could actually become a support factor for the stock."
Litigation Risk Marginally Declining
Overall, the impact of this 944 billion won ruling on SK Hynix's stock price shows a pattern of "short-term sentiment disruption, mid-term neutral digestion, long-term fundamental irrelevance." Today's KOSPI crash was more driven by systemic market adjustments, with the divorce case itself already fully priced in.
The core variables determining SK Hynix's mid-to-long-term valuation remain: the ramp-up progress of HBM3E and next-gen HBM4, supply agreements with AI chip giants like NVIDIA (NVDA), and the upcoming quarterly earnings report on July 29. Amid the accelerating global AI computing race, SK Hynix's technological moat and profit outlook as the global leader in high-bandwidth memory (HBM) are far beyond the reach of a controlling shareholder's personal financial arrangements.
For investors, the endgame of this "divorce of the century" may feel like a well-rehearsed script—much ado about nothing.
