 |
Vice Chairman Choi Chang-won of SK Discovery. (Photo: Yonhap News) |
[Alpha Biz= Paul Lee] 62% of revenue derived from non-competitive inter-affiliate deals; Earnings funnel into holding company SK Discovery to sustain owner control
SEOUL, South Korea — While SK Group leadership continues to emphasize "high-intensity rebalancing" and "transparent management," its key affiliate, SK Gas, is under fire for its heavy reliance on large-scale internal transactions and "rubber-stamp" governance.
Key Findings:
Non-Competitive Reliance: Analysis of regulatory filings (DART) reveals that SK Gas plans to conduct 3.06 trillion KRW ($2.2 billion) in inter-affiliate transactions for 2026. Strikingly, 100% of these deals were signed as private contracts (private placement) without any competitive bidding.
Revenue Concentration: Targeted revenue from these internal deals is estimated at 2.92 trillion KRW, accounting for approximately 62.4% of the company’s total annual revenue.
Funneling Profits to Ownership: These "captive market" profits directly support the dividend income of SK Discovery, the group’s intermediate holding company. In 2024, dividends from SK Gas accounted for over 83.5% of SK Discovery’s total operating revenue, forming a cycle that solidifies the controlling family’s grip on the group.
Passive Board Oversight: Despite Chairman Chey Tae-won’s call for board-centered management, SK Gas’s outside directors maintained a 100% approval rate on all agendas last year, including the massive internal trading plans, raising concerns over the board’s independence.
Strategic Inconsistency Market analysts point out a "strategic mismatch" in the leadership of Vice Chairman Choi Chang-won. While Choi has ordered aggressive restructuring for other affiliates under the "Rebalancing" initiative, his own stronghold, SK Discovery, remains dependent on risk-free, rent-seeking profits from SK Gas. This disparity is increasingly viewed as a significant governance risk that undermines the credibility of the entire group's reform efforts.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
