As closing arguments in Smilegate founder and chief vision officer (CVO) Kwon Hyuk-bin's trillion-won divorce suit enter the final stage after about four years, Smilegate denied the spouse's participation in management. With the last hearing set for July, the dispute is sharpening over the role of Kwon's spouse, a person surnamed Lee, in the company's growth.
According to the industry on the 28th, the Seoul Family Court's Domestic Affairs Division 3 held the fourth hearing on the 27th in the divorce suit filed by CVO Kwon and his spouse, a person surnamed Lee. At the hearing, Smilegate argued that Lee was not a co-founder of the company, did not pay in any capital, and never took part in management. This directly countered the spouse's claim seeking partitioning of half of the equity in Smilegate (formerly Smilegate Holdings) held by CVO Kwon based on alleged initial capital support and management involvement in the early days of the startup.
Earlier, a person surnamed Lee filed a divorce suit against CVO Kwon in Nov. 2022. Lee's side argues the husband is responsible for the breakdown of the marriage and is demanding that half of the 100% equity in Smilegate held by CVO Kwon be partitioned.
Because Smilegate is unlisted, the size of the asset division is expected to hinge on the corporate valuation. The valuation is being conducted by a court-appointed appraiser, and depending on the method, the value could vary widely from 4 trillion won to 8 trillion won. If the discounted cash flow (DCF) method cited by Lee's side is applied, the couple's joint assets are said to reach 8.016 trillion won, while under the inheritance and gift tax law standard chosen by CVO Kwon's side, it is estimated at about 4.9 trillion won.
Lee's side has maintained that, given the marriage lasted more than 25 years and Lee contributed to Smilegate's early founding and company growth, the asset division ratio could be up to 50%. If the court accepts this claim, the size of the division could grow to as much as 4 trillion won.
The fourth hearing drew attention because, after the third, Smilegate had not filed a rebuttal brief and then requested an additional date while denying Lee's claim of managerial contributions. In an official statement issued right after the hearing the previous day, Smilegate said, "The plaintiff, Lee, did not co-found [Smilegate] and did not pay any investment at the time of the company's establishment," adding, "There was no joint management. According to employees at the time, the plaintiff had no desk in the company and never reported to work."
This directly rebutted Lee's claims. Lee has asserted being a co-founder who contributed to the company's growth and said the necessary initial capital was raised with help from Lee's family. Lee's side initially expected arguments to conclude that day but said CVO Kwon's side suddenly requested a continuation, noting it was "intentional trial delay."
The next hearing is scheduled for July 8. Ahead of final arguments, the court reportedly asked both sides to present their positions on corporate valuation methods and related matters. Lee's side submitted a brief asking the court to refer to the "Rhinos case," a damages suit in the 100 billion won range brought by investor Rhinos Asset Management over the failed listing of LOST ARK developer Smilegate RPG.
At the time, the Seoul Central District Court ruled for the plaintiff, recognizing the full 100 billion won based on an accounting firm's report that valued Smilegate RPG at 8.008 trillion won. Lee's side argues that the fact Smilegate RPG, which was a 100% subsidiary of Smilegate Holdings before the merger, was recognized at over 8 trillion won should be factored into assessing the value of the entire group.
Meanwhile, CVO Kwon's side is maintaining the position that it "respects the court's judgment" regarding the corporate valuation methodology. On the Rhinos first-instance ruling, they said it is "unrelated to the divorce suit."