SK Holdings Alleged to Have Served Chairman’s Personal Interests?
The Fair Trade Commission (FTC) started an on-the-spot investigation into an allegation that SK Holdings, the holding company of the SK Group, and Chey Tae-won, chairman of the SK Group, committed a fraud in the process of taking over LG Siltron from LG Group a year ago.
According to an industrial source on August 28, employees of the Business Group Bureau at the FTC raided the SK Group headquarters in Jongno District, Seoul and began to secure relevant materials and data.
SK Holdings acquired LG Siltron, a manufacturer of silicon wafers, a material for semiconductors. SK and chairman Chey bought 70.6-percent and 29.4-percent equities, respectively. Then, the company was renamed SK Siltron.
The FTC is investigating the allegation that SK Holdings undermined its shareholders’ interests by deciding not to buy 100 percent of LG Siltron, even though it was aware that the stock price of the acquired company would rise significantly two to three years later.
Critics say SK Holdings served the personal interests of group chairman Chey by allowing him to purchase a 29.4 percent stake. At the time, Chey bought the stake at about 13,000 won per share through a total return swap, while SK Holdings purchased the stock for 18,000 won per share.
"We decided not to buy 100 percent of LG Siltron since we judged that we have secured an enough stake. We thought that investing our funds elsewhere would better serve the company’s interests,” an SK official said. “Back then, foreign investors, including Chinese investors, were interested in buying a stake in LG Siltron. Therefore, chairman Chey participated in the competitive bid to protect the Korean semiconductor industry, not to pursue his personal interests.”