Korea is one of the great economic success stories of the twentieth century. Yet its experience with law hardly fits the rule-of-law ideal promoted in the literature. This chapter examines the recent proxy battle for control of the board of scandal-plagued SK Corporation by Sovereign Asset Management, a foreign institutional investor. SK is Korea's largest oil refiner and the flagship company of the SK Group, Korea's third-largest chaebol (conglomerate). The company serves as the de facto holding company for the group. Chey Tae-Won, chairman of the board of SK and a major protagonist, is the...

Korea is one of the great economic success stories of the twentieth century. Yet its experience with law hardly fits the rule-of-law ideal promoted in the literature. This chapter examines the recent proxy battle for control of the board of scandal-plagued SK Corporation by Sovereign Asset Management, a foreign institutional investor. SK is Korea's largest oil refiner and the flagship company of the SK Group, Korea's third-largest chaebol (conglomerate). The company serves as the de facto holding company for the group. Chey Tae-Won, chairman of the board of SK and a major protagonist, is the nephew of the company's founder. Sovereign's investment in SK coincided with the emergence of a major scandal in the SK Group brought on by the arrest in early 2003 of Chey Tae-Won and other SK executives on charges of accounting fraud, falsifying financial disclosures, and breach of fiduciary duty. This chapter also discusses the SK scandal in the context of Korean capitalism.