In a divorce ruling, a court ordered Kwon Hyuk-bin, Chief Vision Officer (CVO) of Smilegate, to pay his spouse 35% of Smilegate-related stock and 650 million won in cash as part of the asset division. The court dismissed the spouse's claim for alimony, determining that Kwon CVO was not responsible for the breakdown of the marriage.
The Seoul Family Court's Division 3 ruled on September 9 that Kwon CVO's spouse, identified as Lee, would receive 35% of the stock related to Smilegate as part of the divorce and asset division. The remaining cash amount of 650 million won was ordered to be paid to cover the shortfall based on the asset division ratio.
This ruling comes nearly three years and ten months after the case was filed in November 2022.
The court assessed Kwon CVO's net worth at approximately 7.3375 trillion won, with the value of Smilegate-related stock accounting for about 7.3149 trillion won, or 99.8% of his total assets.
If the stock were to be converted to cash for the asset division, Kwon CVO would need to provide around 2.55 trillion won. However, the court decided to divide 35% of the Smilegate stock in kind instead of cash, noting that Kwon CVO holds 100% of the company's shares, thus posing no risk of losing control over the company.
Even if the ruling is upheld, there will be no change in Smilegate's governance structure. Kwon CVO will retain 65% ownership after the stock division, alleviating concerns that he would need to sell shares to pay the substantial cash settlement.
A key issue in the divorce proceedings was whether Kwon CVO's shares in Smilegate could be considered marital property. The court concluded that Kwon CVO's individual business acumen and management decisions were crucial to the company's growth, leading to a division ratio of 65% for Kwon CVO and 35% for Lee.
The court acknowledged Lee's indirect contributions, citing her previous ownership of shares in Smilegate's predecessor, Smilegate Entertainment, and her long-term commitment to household and childcare responsibilities as factors in including Smilegate shares in the asset division.
Consideration was also given to the financial support Lee's family provided early in the marriage and the substantial dividends Kwon CVO received from Smilegate after the lawsuit was filed when determining the 35% contribution ratio.
The valuation of Smilegate's stock utilized the discounted cash flow (DCF) method. The court noted that intangible assets play a significant role in evaluating the value of gaming companies and that future growth potential must also be considered. The valuation also reflected the merger of Smilegate with four subsidiaries prior to the valuation date.
The court rejected Lee's claim for alimony, determining that Kwon CVO bore no responsibility for the marriage's collapse. It assessed that both parties shared responsibility for the prolonged conflict and its escalation, with the degree of fault being equal.
Lee was designated as the custodian and guardian of their minor children. Kwon CVO is required to pay 20 million won per month in child support until the children reach adulthood and is allowed to maintain visitation rights in accordance with the children's wishes.
Following the ruling, Kwon CVO's attorney expressed some disappointment regarding the court's assessment of the marriage's breakdown but noted that the dismissal of the alimony claim indicates the court found no fault on Kwon CVO's part. The attorney stated that they would review the detailed ruling and consult with Kwon CVO regarding future legal steps.
Smilegate stated, "The company has no position on the personal matters of its major shareholder and will continue to carry out its business as usual."
* This article has been translated by AI.
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