"This Is Not Right, Chairman"...Flood of Criticism over SK hynix's Pursuit of 'Five-Layer Duplicate Listing'

Strong Criticism of Plans to Cross-List Solidigm in the U.S.

Cross-Listing Called "Exporting the Korea Discount"

"SK hynix Must Break Free from a Rubber-Stamp Board that Harms Shareholder Rights"

Yonhap News Agency

The Korea Corporate Governance Forum has criticized SK hynix's move to list its U.S. subsidiary, Solidigm, describing it as a five-layer duplicate listing attempt that is unprecedented globally.

On August 13, the Governance Forum issued a commentary directly mentioning Chey Taewon, Chairman of SK Group, and Koh Seungbeom, Chairman of the Board of Directors at SK hynix, stating, "Sidestepping domestic fair trade law restrictions on three-tier holding structures by expanding the governance pyramid through overseas entities amounts to exporting the so-called 'Korea Discount.'"

Five-layer duplicate listing criticized as an act of exporting the Korea Discount

Yonhap News

The Governance Forum analyzed that the structure of this duplicate listing consists of a five-step chain: Chairman Chey Taewon → SK Inc. → SK Square → SK hynix → SK hynix NAND Product Solutions → Solidigm. The forum stated, "Global major semiconductor companies such as Nvidia and Taiwan's TSMC have no precedent for pursuing duplicate listings of subsidiaries," and emphasized, "Now is the time to prioritize resolving the existing domestic three-layer duplicate listing structure involving SK Inc., SK Square, and SK hynix, rather than further expanding the pyramid through overseas subsidiaries."

The Governance Forum argued that such a complex governance structure and duplicate listing attempt are a core reason for SK hynix's undervalued stock price. SK hynix's 12-month forward price-to-earnings ratio (PER) is about three. J.P. Morgan has estimated that SK hynix will generate a total free cash flow (FCF) of 811 trillion won over the next three years (213 trillion won in 2026, 265 trillion won in 2027, and 333 trillion won in 2028).

The forum also criticized the "capital call" structure, in which SK Telecom (480 million dollars), SK Inc. (250 million dollars), and SK Innovation (380 million dollars) have agreed to invest in Solidigm's parent company. It pointed out that as the performance of Solidigm, nurtured by SK hynix, is distributed before the IPO among other affiliates such as SK Inc. — in which Chairman Chey holds a high equity stake — there may be a transfer of wealth from SK hynix shareholders to other SK affiliates.

"SK hynix's rubber-stamp board must be reformed"

The Governance Forum also placed responsibility on Chairman Koh Seungbeom and six SK hynix outside directors: Jeong Deokgyun, Kim Jeongwon, Yang Donghoon, Son Hyuncheol, and Choi Kanguk. Chairman Chey is a non-registered executive of SK hynix and not a member of the board.

The forum stated, "According to the Commercial Act, directors must convene and submit to the board of directors agendas related to the progress of Solidigm's listing and potential infringement of shareholder rights," and added, "A director's independence is not a gift granted by another, but a professional and self-chosen commitment to shareholders that must be earned and upheld through personal choice and responsibility."

This content was produced with the assistance of AI translation services.