SK Chairman Choi Relinquishes Personal Assets

SK Group Chairman Choi Tae-won, arrested for account fraud, announced today that he would give up his private assets including his shares in the company and other subsidiaries to normalize SK Global. SK Group decided to move toward the holding company system to secure transparent management of its subsidiaries.

SK C&C, whose No. 1 stockholder is Chairman Choi, announced that it would invalidate the stock swap between Chairman Choi and the company last March, an action which was controversial. 6.46 million shares of SK Corp.’s common stock will go back to SK C&C and 3.25 million shares of Walker Hill hotel’s common stock will go back to Chairman Choi.

“Chairman Choi will take the responsibility of a major stockholder to normalize SK Global,” Director Lee No-jong of the SK Restructuring Team, at a press conference at SK headquarters in Jongro-gu Tuesday afternoon, said. “To this end, Chairman Choi will give up private assets including shares of SK Global worth 16.6 billion won or 3.31% and shares of other subsidiaries to SK Global.”

“But the volume, timing and which shares he will drop other than SK Global`s has not been decided yet,” he added. “Since he is giving up personal shares, he will not insist on holding management rights.”

“SK Group will pursue transparent management and move toward the holding company system in the long term,” Lee said. “The role of the Restructuring Team will be reduced to essential work such as coordination of overlapping investments.”

“All creditor banks will strongly request that SK Group take measures including sale of assets and a capital increase to improve its financial structure,” an official at the Financial Supervisory Commission (FSC) said. “But they will maintain the current financial support for foreign trade to sustain the value of the company.”

“An all-out audit is inevitable since the prosecution investigation proved illegal accounting practices on the part of SK Global,” the official also said. “We will also conduct audits for other subsidiaries if there is sufficient evidence to support such an action.”

The government will create a taskforce centering on the FSC to mitigate the effects of the case on the financial market and the economy.