The first-instance verdict in the divorce suit between Smilegate founder and chief vision officer (CVO) Kwon Hyuk-bin and spouse Lee, a person surnamed Lee, is set to be delivered on Sept. 9. Kwon, the CVO, has said he does not want a divorce, while Lee's side argues a divorce is necessary to proceed with asset partitioning.
According to legal sources, the Family Division 3 of the Seoul Family Court held the final hearing date for the divorce suit between CVO Kwon and Lee at 5 p.m. on the 8th.
The suit began in Nov. 2022 when Lee filed for divorce against CVO Kwon. Lee's side claims Kwon, the CVO, is responsible for the breakdown of the marriage and is demanding half of his equity in Smilegate Holdings.
Kwon's side maintains there is no intent to divorce. Even at the third hearing date held in Mar., Kwon's side did not conduct a separate presentation (PT) regarding asset partitioning. The intent is not to do a PT on valuation methods premised on the establishment of a divorce because a divorce is not desired.
By contrast, Lee's side is arguing for asset partitioning on the premise of divorce. The reasons cited are that the marriage lasted more than 25 years and that Lee's contributions to the early founding of Smilegate and the company's growth should be recognized.
In response, the company is said to maintain that "the plaintiff did not provide investment at the time of founding, had no position at the company in its early days, and never reported to work, among other things, and therefore did not participate in actual management."
Earlier, the court assessed the corporate value of unlisted Smilegate Holdings through an external accounting firm appraisal. For asset partitioning due to divorce, the total size of the assets subject to partitioning must first be determined.
First, applying the "discounted cash flow (DCF)" method advocated by Lee's side, the corporate value amounts to 8.016 trillion won. DCF is a valuation technique that estimates appropriate corporate value by discounting to present value the cash revenue a corporation is expected to generate in the future. However, under the standard valuation method of the Inheritance Tax and Gift Tax Act, the equity value is around 4.9 trillion won.
The court decided to conclude pleadings with this session. The sentencing date was set for Sept. 9.