According to the court on the 15th, Chairman Choi Tae-won announced a motion for appeal at the initial appellate hearing where he had decided to pay 944 billion won of insolvency division in cash. The chairman’s side indicated that they had submitted the appeal considering several circumstances and stated that they would proceed with the approach “to minimize negative impact on shareholders and the group’s management.”
In the initial appellate hearing, Chairman Choi had to either sell or expand SK (Inc.)’s equity holdings and provide cash payment. This process takes some time. In an appeal hearing case, providing cash payment delays the effect of a definitive judgment, and the insolvency division scheme attaches a 5 % daily delay penalty after the date of the final judgment. The penalty that accrues each day for delayed payment is about 129 million won.
In the appeal hearing, it is expected that the selection method for insolvency division will be followed in an orderly manner. However, the Supreme Court’s decision is considered a legal review that focuses on proper application of law rather than factual facts. The Supreme Court’s ruling, based on the fact that SK (Inc.)’s equity holdings are included as a subject of division due to the reason that it can provide benefits for shareholders and group management, is a typical case in the initial appellate hearing.
The view that the time point for determining the division amount is the decision date of the initial appellate hearing has been rejected, but even after the conclusion of the appeal court, the decision to pay 944 billion won by reflecting the share price increase of SK (Inc.) and applying the division ratio can still be applied while re‑trial proceeds. Such a ruling also has the effect of alleviating the time and financial burden that occurs when SK (Inc.)’s equity is paid in cash at the payment moment.
Korean Daily, dong2@hankyung.com