5 Questions About SK Group

Chey Tae-won, chairman South Korea’s third-largest conglomerate, SK Group, is free to resume his duties now that an Aug. 13 pardon by President Park Geun-hye has brought an early end to his four-year prison sentence. On Aug. 1, the conglomerate merged its holding company SK Holdings Co. with an affiliate company in a $7.6 billion deal. (Updated Aug. 13.)

#1: What is SK Group?

SK Group is one of South Korea’s four largest chaebol, or family-owned conglomerates. Its initials stand not for “South Korea” but for “Sunkyong,” a textiles company that is a forerunner of today’s group. The chaebol trace their roots to just after the Korean War, when the government promoted certain companies to take the lead in industries it thought could thrive internationally and help raise the nation out of poverty.

#2: Why haven’t I heard of it?

The SK Group isn’t as well known by non-Korean consumers as the country’s other three main conglomerates—Samsung Group, Hyundai Group and LG Group—because its businesses are concentrated in energy, chemicals and semiconductors. Within South Korea, it is recognized for its gas stations and for running the country’s largest telecommunications operator, SK Telecom. SK Hynix, another affiliate, is the world’s No. 2 memory-chip maker behind Samsung Electronics, so there’s a good chance your laptop is using its chips.

#3: So how big is it?

The country’s third-largest chaebol, SK Group is a sprawling empire of about 80 companies, grouped into roughly three realms: energy and chemicals, semiconductors and technology, and marketing and services. More than half of sales last year came from the energy and chemicals division. Last year, it racked up a collective $156.6 billion in revenue, more than General Electric Co. and roughly half as much as Exxon Mobil Corp.

#4: Who is Chey Tae-won?

The nephew of the founder and former chairman of SK Group, Mr. Chey is one of the best-connected men in South Korea and ranked by Forbes as the country’s sixth-richest person, with a net worth of $4.3 billion. He studied for a doctorate in economics at the University of Chicago, though he didn’t graduate. In 1988, he married the daughter of Roh Tae-woo, who was then president of South Korea.

#5: Why is Mr. Chey so controversial?

SK Group’s current chairman has one of the longest criminal records among South Korea’s conglomerate families, having been convicted three times—in the U.S. in 1993 and by South Korean courts in 2003 and 2013—each time for financial misdeeds. Mr. Chey was granted presidential pardons in both the second and third cases, though in the third case it came only after serving a portion of his four-year sentence at a correctional institute in a northern suburb of Seoul. South Korean President Park Geun-hye pardoned Mr. Chey along with 6,526 other people on Aug. 13.