Will Hyukbin Kwon’s Single-Shareholder Control End?... Smilegate Vows to Focus on Core Business

Court Orders 35% of Shares to Be Given to Spouse
Difficulties Anticipated in Independently Handling Major Issues such as Mergers

The court has ordered Kwon Hyukbin, Founder and Chief Vision Officer (CVO) of Smilegate, to allocate 35% of his company shares to his spouse, Lee, in their divorce proceedings. This ruling, delivered after more than two decades of single-shareholder control of Smilegate, signals a potential shift toward a different ownership structure for the company. While Kwon will retain management rights with his remaining 65% stake, it will become difficult for him to handle certain special shareholder resolutions—such as amending the articles of incorporation, or approving mergers and splits—on his own.

Hyukbin Kwon, Founder and Chief Vision Officer (CVO) of Smilegate. Photo by Yonhap News

On September 9, the Family Division 3 of the Seoul Family Court (Presiding Judge Jeong Dong-hyuk) upheld Lee’s divorce petition, ruling that "the defendant (Kwon) should transfer 35% of Smilegate’s shares in kind to the plaintiff (Lee) as part of the property division." The court recognized Lee’s contributions to household affairs and child-rearing, awarding her approximately 2.4867 trillion won in shares and 65 billion won in cash, out of a total Smilegate stake valued at 7.1049 trillion won.

This property settlement is more than twice the 944 billion won set for the divorce settlement between Chey Tae-won, Chairman of SK Group, and Roh So-young, Director of the Art Center Nabi, in July. It now stands as the largest divorce settlement in South Korea’s history. However, the court dismissed Lee’s claim for damages.

If finalized, the ruling would reduce Kwon’s shareholding to 65%. Although this allows him to maintain a majority stake and defend general management rights, it inevitably weakens his control over the company. According to Korean commercial law, critical matters such as mergers, splits, amendments to the articles of incorporation, and dismissal of directors or auditors all require a special resolution by the general shareholders’ meeting, passing with at least two-thirds approval from shareholders present. Thus, Kwon will no longer be able to make significant decisions without Lee’s agreement, as she would hold 35% of the shares.

Industry observers speculate that Kwon is highly likely to appeal, citing these restrictions. If the single-person control structure collapses, Lee could interfere in management by requesting the convening of an extraordinary shareholders’ meeting or sell her shares to a third party. During the litigation process, Kwon’s representatives argued that "Lee is neither a co-founder nor a capital investor."

Kwon’s legal representative stated, "The dismissal of the damages claim suggests that the court found no grounds for fault on the defendant’s part," adding, "The next steps will be decided after reviewing the full verdict and consulting with our client."

The company stated that it remains focused on game development and increasing revenue. A Smilegate spokesperson commented, "The company has no special statement to offer regarding the personal affairs of its major shareholder," adding, "Smilegate will continue to faithfully perform its core work as always."

This content was produced with the assistance of AI translation services.