Smilegate Founder Kwon Hyuk-bin’s Wife Wins Divorce Petition, with Record 2.5 Trillion Won Property Division

[Financial News] The court has granted the divorce petition filed by Kwon Hyuk-bin, Smilegate’s founder and Chief Vision Officer (CVO). It ordered Kwon to transfer 35% of his Smilegate shares to his spouse, identified by the surname Lee, as part of the property division. The shares to be transferred are estimated to be worth 2.4 trillion won, which would make this the largest property settlement in a divorce case in South Korea’s history.
The Seoul Family Court’s Family Affairs Division 3, presided over by Judge Jeong Dong-hyeok, granted Lee’s divorce petition against Kwon on the 9th. It ordered, "The defendant, Kwon, shall transfer 35% of his Smilegate shares to the plaintiff, Lee, in kind as property division." The settlement will be paid in shares rather than cash.
Lee is set to receive a first-instance ruling about four years after filing the lawsuit in November 2022. The court stated, "After reviewing the circumstances that led to the parties’ prolonged conflict and the possibility of restoring their relationship, we determined that the marriage had broken down beyond repair." It added, "Both the plaintiff and the defendant are responsible, and we find their degrees of responsibility to be equal. Therefore, we grant the plaintiff’s divorce petition but dismiss her claim for consolation money."
The court valued Kwon’s Smilegate shares at approximately 7.1049 trillion won. If the ruling becomes final, the shares Kwon must transfer will be worth 35% of that amount, or 2.4867 trillion won.
The couple reportedly began living separately in 2020, before the lawsuit was filed. Lee filed for divorce two years later, alleging that Kwon had neglected his family. During the proceedings, she argued that she had contributed to the company’s management because she held a 30% stake in Smilegate during its early founding period and was registered as both CEO and a board member. Taking into account that she had handled household duties for more than 20 years, she sought half of Kwon’s Smilegate stake.
Kwon argued that he had not been at fault and did not want a divorce. He also claimed that Lee could not be considered a co-founder because she had neither invested in nor worked for the company in practice.
The court determined that Kwon’s Smilegate stake was subject to division, taking into account that Lee held part of the shares and was registered as CEO when Smilegate was founded, as well as her long-term contributions to household and child-rearing responsibilities.
The court stated, "It would be practically difficult for Kwon to raise the property settlement without disposing of his shares, but these shares are in an unlisted company and are not easy to sell." It added, "We order 35% of the shares to be divided in kind, and require the payment of the remaining 65 billion won of the total property settlement in cash."
Among the property settlements in known divorce cases involving South Korean chaebol families, the 944 billion won awarded in the appellate remand ruling last July involving Chey Tae-won, chairman of SK Group, and Roh So-young, director of Art Center Nabi, had been regarded as the largest to date. If the first-instance ruling is finalized, this case is expected to become South Korea’s largest divorce and property-division lawsuit.
After the ruling, Smilegate said, "We have no particular position regarding the personal affairs of our largest shareholder." It added, "We will continue to faithfully carry out our core duties as before."
[email protected] Chang-hoon Lee Reporter