35% Smilegate stake plus 65 billion won in cash
Divorce settlement is largest on record
Court finds both spouses responsible for marriage breakdown
A South Korean court has ordered Smilegate founder and Chief Vision Officer Kwon Hyuk-bin to give his estranged spouse a 35 percent stake in Smilegate in their divorce settlement. He must also pay 65 billion won ($48.5 million) in cash. Combined, the stock and cash amount to about 2.55 trillion won, making it the largest property division award in South Korean divorce history.
The Seoul Family Court's Family Division 3, headed by Chief Judge Jung Dong-hyuk, ruled Wednesday in the couple's divorce case. Kwon must divide 35 percent of his Smilegate shares in kind and pay the remaining 65 billion won in cash to make up the shortfall in the division ratio.
The court found that both Kwon and his spouse, Lee, bore equal responsibility for the breakdown of the marriage. It therefore granted the divorce but dismissed Lee's claim for alimony.
The court set the property division ratio at 65-35. "Kwon's business acumen and management decisions appear to have had a decisive influence on the company's growth," the court said. "The ratio was determined by taking into account Lee's financial support during the company's growth, as well as the circumstances that led to the breakdown of the marriage," it added.
The court noted that Kwon holds net assets totaling 7.33 trillion won. About 7.15 trillion won, or roughly 96.8 percent, of that is tied up in Smilegate shares that would be difficult to liquidate. It therefore ordered division in kind. This method transfers ownership of assets such as real estate or shares directly to the other party rather than converting them to cash.
Kwon met Lee while they were in university, and the two married in 2001. Kwon went on to found Smilegate, which grew into a company with sales in the trillions of won after its game "CrossFire" became a hit in China.
Lee filed for divorce against Kwon in November 2022. During the trial, Lee sought half of Kwon's assets, arguing that 20 years of marriage and raising their children had contributed to building the couple's wealth.
Lee had earlier been registered as Smilegate's representative from July to November 2002. Lee held a 30 percent stake in the company when it was founded with 50 million won in capital. That stake was reportedly sold around 2010.
If finalized, Wednesday's ruling would stand as the largest property division award in South Korean history. It follows a recent retrial in the divorce case between SK Group Chairman Chey Tae-won and Roh Soh-yeong, director of the Art Center Nabi. In that case, the court ordered Chey to pay 944 billion won.
notstrong@heraldcorp.com
