SK Group Chairman Chey Tae-won/Courtesy of SK Group

Why SK Chairman Chey Tae-won runs risks

When SK Group founder Chey Jong-kun died of lung cancer in 1973 at the age of 47, his younger brother Chey Jong-hyon took over instead of young sons of the former.

A quarter-century later, the same disease claimed the life of the latter. And his son, Chairman Chey Tae-won, took charge of the group, one of the country’s five largest conglomerates, in 1998 at the age of 37.

After that, he managed to catapult the Seoul-based group to the next level through a series of M&A deals, the business knack that he learned from his father.

For example, Chairman Chey decided to purchase SK hynix at around $3 billion in 2012 despite the opposition of his men. Now, the world’s No. 2 maker of memory chips is the group’s cash cow.

Chairman Chey’s father also led the acquisitions of what are now SK Innovation, Korea’s top oil refiner, and SK Telecom, the country’s primary mobile telephony service provider.

However, Chairman Chey’s career has been far from the bed of roses because he was imprisoned twice.

In early 2013, he was found guilty of embezzling more than $40 million from SK subsidiaries to cover up trading losses. Back then, he was sentenced to four years in prison.

It was Chey’s second conviction as the billionaire businessman was given a three-year jail term in 2003 for his role in a $1.3 billion accounting fraud.

In both cases, he was granted full presidential pardons, which wiped his record clean.

Responsible corporate citizen?

After Chey was released in 2015 on a controversial pardon, he apologized and vowed to reform SK Group so that it can become a responsible corporate citizen.

And Chey tried to keep his promises as amply demonstrated by the group’s all-out support of social enterprises.

Yet, Chey grabbed headlines once again late last month when the country’s financial watchdog fined a local brokerage with regards to its funding of SK Group’s purchase of LG Siltron in 2017.

SK bought a 51 percent stake of the wafer maker from LG. Among the remaining 49 percent, Chey gobbled up 29.4 percent based on funds secured through a total revenue swap (TRS) deal with the brokerage.

The Financial Services Commission fined the brokerage as it is not allowed to channel funds to individuals.

In fact, there have been debates whether Chey’s purchase of the stake is against the law as the country prohibits the misappropriation of a firm’s business opportunities.

In other words, the relevant laws prevent any insiders from seeking personal gains by taking advantage of their companies’ information or business opportunities.

SK Group claimed that Chairman Chey opted to buy the stake at issue to safeguard the country’s semiconductor market as some overseas investors tried to snap it up.

An SK official said that Chey decided to make the investment because nobody wanted to buy the 29.4 percent stake in Korea. In other words, the official said that Chairman Chey did not seek his personal gain.

Even if Chey really tried to protect the country’s interest, not his own, the question is why he ran risks – he was involved in a transaction that some claim is not legal.

If I were in his shoes, I would never want to be related to any suspicions after spending 38 months in prison – seven months in 2003 and 31 months during 2013-15.

In case there is even a slight chance that he is embroiled in legal disputes, he had better just shun it. That is the burden imposed on an ex-convict.


The publisher studied Korean history in Seoul and management of business administration in the United Kingdom. He has 20-year experiences in the media business. Kim can be reached at or 82-2-6956-6698.