Smilegate Founder Ordered to Transfer $1.9B in Shares in Record Divorce
A South Korean court ordered Smilegate founder Kwon Hyuk-bin to transfer 35% of his shares, valued at $1.9 billion, to his ex-wife, setting a historic national divorce record.
A South Korean family court has ordered Smilegate founder and billionaire Kwon Hyuk-bin to transfer 35% of his shares in the gaming company to his ex-wife, marking the largest divorce settlement in South Korean history. The court ruled on Tuesday in favor of the divorce petition filed by Lee Hwa-jin against Kwon, stating that after examining the long-standing conflict, its escalation, and the prospects for reconciliation, the marriage had reached an irreparable breakdown, with responsibility shared equally between both parties. Lee filed the lawsuit in November 2022, meaning the legal proceedings lasted approximately four years before the verdict.
Division of Assets and Judicial Rationale
According to reports, the court estimated the value of Kwon's Smilegate shares at approximately 7.1 trillion won ($5.3 billion), making the 35% stake awarded to Lee worth about 2.49 trillion won ($1.9 billion). Lee had requested half of Smilegate's shares, arguing that she contributed to the company's establishment, growth, and the accumulation of their joint wealth. She noted that she held 30% of the company's shares in its early years, served as its CEO and registered director, and dedicated over 20 years to raising their children and managing the household. Kwon argued that Lee invested no funds and did not actually work at the company, denying her status as a co-founder and rejecting responsibility for the marital breakdown.
The court dismissed Lee's claim for damages related to the dissolution of the marriage but accepted her position on the central dispute: whether Smilegate shares should be included in asset division. In its ruling, the court cited the company's history, Lee's past shareholdings and her role as a director at parent company Smilegate Entertainment, as well as her sole responsibility for the household and child-rearing over many years. Consequently, the court ruled that the shares constitute property generated jointly, directly or indirectly, by both spouses. This settlement far exceeds the previous record of 944 billion won ($720 million) ordered by a Seoul high court in the divorce of SK Group Chairman Chey Tae-won.
Impact on Control and Corporate Future
If finalized, the transfer will end Kwon's exclusive ownership of the private gaming company. Kwon has held 100% of Smilegate's shares since 2012. Analysts estimate that while Kwon will retain 65% of the shares and practical management control, it will be harder for him to independently advance critical decisions requiring a special majority at a general meeting, such as charter amendments, mergers, or spinoffs. This significantly increases the likelihood that Kwon will appeal the verdict.
«The marriage had reached an irreparable breakdown, with responsibility shared equally between both parties.»
Kwon, 52, is estimated by Bloomberg to have a net worth of about $3 billion, although other estimates, including Forbes, have previously placed his wealth higher, ranking him among South Korea's five wealthiest individuals. Kwon founded Smilegate in 2002 and currently serves as Chief Vision Officer of the country's third-largest gaming company. The firm is best known for the first-person shooter Crossfire—which once peaked at over six million concurrent players worldwide—along with the massively multiplayer online role-playing game Lost Ark and the real-time strategy game WarReign.
