SK Group chairman Chey Tae-won is selling 2.26% of SK Inc, the holding company that sits on top of SK Hynix, to pay his divorce settlement. But one part of that sale is not really a sale. For 681,431 shares, about 0.94% of the company, Chey signed a price return swap with Korea Investment & Securities, worth 400 billion won. On paper the shares leave his hands. In practice, the stock’s ups and downs still land on him.
This is the second piece on this case. The first one explained why the court froze SK’s price at 2024 levels when it set the award. This one is about how he is paying it.
Two buyers, two very different deals
Chey’s filing in early October set the total at 1,653,924 shares, worth 944 billion won. That amount matches what the court ordered him to pay his former wife, Roh Soh-yeong. After the sale, his own stake drops from 17.8% to 15.5%, and he stays the largest shareholder.
The shares go two ways:
- 972,493 shares (1.34%) go to DFO Public Investments, a Delaware fund tied to Michael Dell’s family investment office, for 544 billion won (about $406 million), Reuters reported. This is a normal sale. The fund pays, owns the shares, and lives with the price.
- 681,431 shares (0.94%) go to Korea Investment & Securities through the swap. This one only looks like a sale.
How a price return swap works
A price return swap separates two things that usually come together: holding a share, and carrying its price risk.
Here is the simple version. The securities firm pays Chey cash now and takes the shares. After the contract ends, three years later in this case, the two sides compare the stock’s price with the agreed starting price and settle the difference. If SK Inc has gone up, Chey gets the gain. If it has gone down, Chey pays the loss. The firm earns a fee and is protected on its principal, as the Korea Herald explained.
So the firm owns the shares, and the voting rights go with them. But the money question, whether SK Inc is a good bet for the next three years, stays with Chey. Korean business daily Herald Business described it as closer to a loan than a sale: Chey gets cash today while keeping his exposure to the stock.
This is not new for SK. The group has used similar swap deals before, including a total return swap through which Chey holds his stake in wafer maker SK Siltron.
Why the Dell half drew questions
The Dell sale looks cleaner, but it raised a different issue. SK first described the buyer only as a “strategic investor.” The Korea Corporate Governance Forum, a local watchdog, said that if Chey and the buyer agreed, even informally, to vote the same way, they would have to report their stakes together as joint holders. Failing to do that would break Korea’s capital markets law, the group said. Dell Technologies supplies AI servers and does business with SK Hynix, though the buyer is a Dell family fund, not the company.
Put the two halves side by side and the pattern is clear. The swap moves the votes out but keeps the price risk with Chey. The Dell sale moves both out, to a buyer people are now asking about.
My take: The shares moved out. The price stayed home.
Not advice. Just how I see it.