'Responsibility for marriage breakdown is equal on both sides'

Kwon holds 100% of Smilegate; company control unaffected even if 35% share division ruling is finalized

Kwon Hyuk-bin, founder and chief vision officer (CVO) of South Korean game company Smilegate [Yonhap]
Kwon Hyuk-bin, founder and chief vision officer (CVO) of South Korean game company Smilegate [Yonhap]

A court has ruled that the divorce of Smilegate founder Kwon Hyuk-bin, the game company's chief vision officer, is finalized, but it rejected his former spouse's claim for alimony, saying responsibility for the marriage's breakdown lies equally with both sides.

Although 35 percent of Smilegate's shares are subject to the property division, Kwon holds 100 percent of the company's equity. Industry watchers expect the ruling, even if finalized, will not affect corporate governance.

Since Kwon is widely expected to appeal the ruling, attention is also turning to whether the scale of the property division could change going forward.

The Seoul Family Court's Family Division 3, headed by Presiding Judge Jeong Dong-hyeok, on Wednesday granted the divorce petition filed by Kwon's former spouse, identified as Lee, against Kwon. The court ordered Kwon to pay Lee 35 percent of Smilegate shares in kind, along with 65 billion won ($48.5 million) in cash, as part of the property division.

The court went on to say that Kwon must pay Lee a total of about 2.55 trillion won.

The amount marks a new record high for a property division settlement in a domestic divorce case.

Smilegate's headquarters building in Seongnam, Gyeonggi Province (Courtesy of Smilegate)
Smilegate's headquarters building in Seongnam, Gyeonggi Province (Courtesy of Smilegate)

However, the court dismissed the claim for alimony. It said, "Both the plaintiff and the defendant bear responsibility, and their degrees of responsibility are equal. Therefore, the plaintiff's divorce petition is granted, but her claim for alimony is dismissed."

The court set the share division ratio at 35 percent for Lee and 65 percent for Kwon. Even if the ruling is finalized as is, Kwon will retain a 65 percent stake and keep control of the company. Kwon has held 100 percent of Smilegate's equity since 2012.

The divorce case could still drag on before a final conclusion is reached. Industry sources believe Kwon is likely to appeal. It took about four years for the first-instance ruling to come out after Lee filed the suit in November 2022.

Meanwhile, Kwon graduated from Sogang University with a degree in electronic engineering in 1999 and married Lee in 2001. He founded Smilegate the following year.

Lee filed for divorce in 2022, citing Kwon's neglect of the family. During the trial, she argued that she held a 30 percent stake in Smilegate in its early days and contributed to its management. She called for half of Kwon's stake in Smilegate to be divided with her.

Kwon, for his part, maintained that he was not at fault and did not want the divorce.


sjpark@heraldcorp.com