SK Group Chair $1B Divorce, UAE Trade Agreement, and North Korean Crypto Theft

Record-Breaking Divorce Settlement Rocks SK Group, SK Affiliates Expand Secondary Battery Material Production, South Korea Strengthens Ties with the UAE and Africa, North Korea's Crypto Heists Fuel Weapons Development

SK Group Chairman Chey Tae-won in front of SK Group logo
SK Group Chairman Chey Tae-won

Record-Breaking Divorce Settlement Rocks SK Group

In a stunning development, the Seoul High Court has ordered SK Group Chairman Chey Tae-won to pay a staggering 1.38 trillion won ($1.05 billion) in asset division to his ex-wife Noh So-young, along with an additional 20 billion won ($15.2 million) in compensation. The record-breaking divorce settlement, which recognizes Noh's significant contributions to SK Group's growth during their 30-year marriage, has sent shockwaves through the business community. Chey is expected to appeal the decision to the Supreme Court, buying time as he grapples with the potential impact on his control over the conglomerate. The high-stakes legal battle highlights the vulnerability of South Korea's family-run chaebol, where the ownership structure is often concentrated in the hands of a few key individuals.

To minimize the erosion of his control, Chey is likely to explore various options to raise the necessary funds while retaining as much of his 17.73% stake in SK Inc., the group's holding company, as possible. One potential avenue is the sale of his 29.4% stake in the unlisted subsidiary SK Siltron, a major producer of semiconductor wafers. Chey may also seek to secure stock-backed loans to cover a portion of the settlement. However, industry watchers caution that a hasty sale of SK Siltron shares could result in a suboptimal valuation, given the urgency of the situation.

The divorce settlement comes at a challenging time for SK Group, as it navigates a perfect storm of financial troubles at its affiliates and the distraction of the chairman's personal legal dispute. The conglomerate's total borrowings have surged from 61 trillion won in 2019 to an estimated 117 trillion won in 2023, prompting the need for business restructuring to address the mounting debt. As Chey's control comes under pressure, concerns have risen about the potential for a management rights dispute should his stake in SK Inc. be significantly reduced. The prolonged legal battle may also divert attention from crucial strategic decision-making and long-term planning, while the high-profile nature of the divorce case could lead to reputational damage and investor uncertainty.

SK Affiliates Expand Secondary Battery Material Production

Amid the leadership turmoil, SK Group's affiliates are forging ahead with their expansion plans in the booming secondary battery material sector. Posco E&C, the construction arm of the Posco Group, has taken a central role in building battery material factories for SK affiliates, leveraging its expertise in engineering and project management. The company recently completed the construction of the world's largest single-site cathode material plant and a state-of-the-art synthetic graphite anode material facility, positioning SK as a key player in the global electric vehicle (EV) supply chain. Posco E&C is also actively involved in lithium mining and refining projects in Argentina, securing a stable supply of the critical raw material for SK's battery production.

The aggressive expansion in secondary battery materials is driven by the exponential growth in global demand for EVs and the need for a robust, localized supply chain. South Korea, already home to leading battery makers like LG Energy Solution and Samsung SDI, is doubling down on its investments to maintain its competitive edge against rising Chinese rivals. The government has pledged support through subsidies, tax incentives, and R&D funding to nurture the industry, recognizing its strategic importance for the nation's economic future. In 2022, South Korea's secondary battery exports reached $13.3 billion, with expectations of further growth as the world transitions to cleaner energy sources.

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Jamie Larson