SK chairman appears in antitrust session to defend stock purchase

SK Group Chairman Chey Tae-won made a rare appearance in a session held by the nation’s top antitrust watchdog to defend his controversial stock purchase in 2017, when SK acquired a silicon wafer unit from its crosstown rival LG Group. 

The Fair Trade Commission has reviewed the case over allegations that SK Inc., the holding company of SK Group, deliberately helped its chairman purchase the stock at a cheaper price to benefit from hefty dividends. 

The deliberation session was held to finalize the level of punitive measures to be imposed on SK.

Upon arrival at the government complex building in the administrative city of Sejong earlier in the day, Chey remained mum when asked by reporters about his stance. 

It was a rare case in which a chaebol chairman expressed his will to voluntarily attend an antitrust session in person. He reportedly fully explained the reasons the purchase was made, claiming the legitimacy of the whole process. 

In 2017, SK Inc. acquired a 51 percent stake in what was then LG Siltron in January and another 19.6 percent in April. The firm, having become the largest shareholder, had no incentives to further purchase the stock, according to the company.

Creditors and investors who owned the remaining 29.4 percent sought to sell the stock to a third-party buyer, with a foreign investor offering the highest price. 

But for SK and its chairman, a foreign investor taking a sizable stake in a strategically important semiconductor unit was not welcome news, even though the financial investment would not pose a direct threat to the ownership. 

Chey therefore participated in the bidding and purchased the remaining stock worth 253.3 billion ($214.4 million), the company explained. 

But in November 2017, a civic group filed a complaint with the FTC, protesting that SK Inc. unfairly gave up a business opportunity to elevate its dividend profits and yielded the lucrative chance to its chairman unfairly. SK refuted the claims immediately. 

Regardless of the chairman’s “goodwill,” he earned huge dividends over the past years as the renamed SK Siltron continued posting upbeat sales amid soaring demand for computer chips. This year, the firm, which produces wafers for a slew of clients, including SK hynix, Samsung Electronics and Intel, are expected to see record sales.

The FTC, which launched a probe into the case in 2018, has finished the review and sent the findings to SK. Depending on the results of the deliberation session, SK can face punitive measures, including fines, corrective orders or a complaint with the prosecution. 

By Lee Ji-yoon (jylee@heraldcorp.com)