Summary of Key Points
Choi Tae-won, the chairman of South Korean SK Hynix, has been in a divorce lawsuit with his ex-wife, Lu So-young, over property for nearly 10 years. On July 24th, the latest verdict was announced: Choi Tae-won is ordered to pay his ex-wife 944 billion Korean won (approximately 4.36 billion Chinese yuan), making this the highest-value divorce case in South Korean history. This decision represents a compromise, falling between the initial ruling of 665 billion Korean won (too low) and the second-instance ruling of 1.38 trillion Korean won (too high). The verdict acknowledges Lu So-young's contributions to SK Group by including SK shares in the division of assets, while excluding the “illegitimate funds” provided by her father, Lu Tae-woo, from being considered part of her contribution. It is unlikely that Choi Tae-won will appeal, bringing this lengthy legal battle to a close.
Detailed Analysis
1. The Exorbitant Division Amount: How Was the “Compromise” Reached?
The final amount of 944 billion Korean won was a result of the court seeking a balance between the two parties' demands:
- First Instance (2022): The court awarded only 665 billion Korean won in property division plus 100 million Korean won in compensation for emotional distress. Lu So-young was dissatisfied, believing her contributions over 34 years of marriage—helping Choi Tae-won stabilize the family and using her political connections to support SK Group—had been completely overlooked, leading to an appeal.
- Second Instance (2024): The amount was increased to 1.38 trillion Korean won in property division plus 2 billion Korean won in compensation for emotional distress. Choi Tae-won appealed again, arguing that most of the SK shares were inherited from his father and not jointly earned by the couple.
- Retrial (2026): The Supreme Court ordered a retrial of the property division, requesting a clearer definition of “joint marital property.” The final ruling settled on a middle ground: it recognized Lu So-young's contributions by including SK shares as joint property but excluded the “illegitimate funds” from her father’s contribution.
In essence, the court aimed to avoid favoring either party and found a figure that both could accept.
2. The Ten-Year Legal Battle: Two Core Disputes
The prolonged litigation centered around two main issues:
- Dispute 1: Are SK shares considered joint marital property?
Choi Tae-won argued, “The SK shares I own were inherited from my father; they weren’t earned together, so they shouldn’t be divided.”
Lu So-young countered, “I helped manage the household for 34 years and used my father’s (former President Lu Tae-woo’s) connections to secure government support for SK Group. The increase in stock value is partly due to my efforts, so I deserve half of it.”
The final ruling determined that SK shares are indeed joint property, giving Lu So-young victory on this point.
- Dispute 2: Which Time Point Should Be Used for Property Valuation?
Lu So-young wanted the valuation to be based on the current market value, as SK Hynix’ stock price has soared due to the AI boom (from 160,000 Korean won to 800,000 Korean won), doubling Choi Tae-won’s wealth.
Choi Tae-won argued that the AI strategy was implemented after their marriage and Lu So-young was not involved, so the valuation should be based on the lower price before the stock price increase.
The ruling did not specify a time point but settled on an amount that reflected both views, representing a compromise.
3. Is There Still Room for Appeal?
Although South Korean law allows for three appeals, this case was a “retrial of the second instance,” meaning further appeal to the Supreme Court is possible in theory. However, it is unlikely that Choi Tae-won will do so:
- Limited Reasons for Appeal: The Supreme Court only accepts appeals regarding errors in the application of the law, not factual issues such as the amount of property division. Since the ruling followed the Supreme Court’s previous guidance (excluding illegitimate funds), finding legal grounds for appeal would be difficult.
- High Risk: If the appeal fails, Choi Tae-won might have to pay even more than the original amount (e.g., returning to the second-instance figure of 1.38 trillion Korean won). It is not worth taking that risk, so he likely will not appeal.
4. The Impact of AI on the Case: The Rise in Stock Price
The soaring stock price due to the AI boom played a significant role in the high division amount. SK Hynix, the world’s second-largest memory chip manufacturer, has seen a surge in demand for DRAM and NAND flash memory, driving its stock price up significantly. Choi Tae-won’s wealth has more than doubled from about $2.8 billion last year to $5.6 billion. Lu So-young’s insistence on using the current high stock price reflects the impact of AI on the division of assets.
5. The Impact on SK Group: Short-term Stability, Long-term Risks
The verdict has both short-term and long-term implications for SK Group:
- Short-term: If Choi Tae-won pays in cash, he won’t need to sell a large number of SK shares, preventing a sharp drop in the stock price and ensuring company stability.
- Long-term: The ruling establishes that SK shares are joint property, which could lead to future divisions of assets if other family members divorce or if Choi Tae-won faces similar issues, potentially affecting the company’s control. This poses a significant long-term risk for the chaebol (South Korean conglomerates).
In summary, this “century-long divorce case” is coming to an end. It represents not only a battle over property but also the complex interconnections between South Korean chaebol families, politics, and business, as well as the new disputes arising from wealth growth in the AI era. For ordinary people, the most striking aspect is that when wealthy individuals divorce, what’s at stake is not just the money but the future of entire business empires.