The court has recognized Kwon Hyuk-bin, Chief Vision Officer of Smilegate, as having a 35% spousal contribution in his divorce case, ordering the division of unlisted stocks. This contrasts with the ruling in the divorce case of Choi Tae-won, chairman of SK Group, where Noh So-young's contribution was set at one-third, while Choi retained his shares. Although the contributions were similar, the division method differed based on the 'nature of the assets and their liquidity.'
On September 9, the Seoul Family Court's Division 3, led by Judge Jeong Dong-hyuk, accepted the divorce petition filed by Kwon's spouse, identified as Ms. Lee, and ordered Kwon to pay her 35% of his Smilegate shares and 65 billion won in cash. The total property division amounts to approximately 2.55 trillion won.
The court determined that the couple's marriage had irreparably broken down and that both parties bore equal responsibility. While the divorce petition was granted, Ms. Lee's claim for alimony was dismissed. The dismissal does not imply that Kwon is free from blame for the marriage's collapse.
A key issue was whether the Smilegate shares held in Kwon's name could be considered jointly acquired property. The court noted that Ms. Lee held shares during the company's early establishment and was registered as a director and CEO. Her economic support during the early years of their marriage and her long-term contributions to household management and child-rearing were also acknowledged as part of her contribution.
However, the court concluded that Kwon's business acumen and management decisions were crucial to Smilegate's growth, setting the property division ratio at 65% for Kwon and 35% for Ms. Lee. Although the court did not explicitly recognize Ms. Lee as a co-founder, it reflected her early involvement and direct and indirect contributions during the marriage in the property division.
In July, the appellate court in Choi's divorce case also recognized Noh's contributions to the formation, maintenance, and value increase of SK shares during their marriage. The Seoul High Court's Family Division 1, led by Judge Lee Sang-joo, set the division ratio at two-thirds for Choi and one-third for Noh, ordering Choi to pay Noh 944 billion won.
However, the assessment of contributions differed between the two cases. In Choi's case, the Supreme Court excluded 30 billion won in illegal funds linked to the late former President Roh Tae-woo, ruling that such funds fall outside the protection of the law due to their 'anti-social and unethical nature.' This led to a reduction in the property division amount from 1.38 trillion won to 944 billion won.
The division methods also varied. In Choi's case, he retained his shares while paying Noh in cash. In Kwon's case, 35% of the unlisted shares, valued at approximately 7.1 trillion won, will be directly transferred to Ms. Lee.
Given that most of Kwon's wealth is tied up in Smilegate shares, raising 2.55 trillion won in cash would require selling stocks. The difficulty of selling unlisted shares and the associated taxes and costs were considered. The fact that Kwon would not lose control even after transferring 35% of the shares also supported the in-kind division.
Kwon's case is still in the first instance. Once the ruling is finalized, it will become the largest property division case in a public divorce lawsuit in South Korea. However, the appellate court may reassess the division targets, ratios, stock values, and in-kind division methods. Choi's case is also under review, with the Supreme Court yet to decide on 244 billion won of the 944 billion won in question.
* This article has been translated by AI.
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