Byungju Kim, Chairman of MBK Partners (Photo: Yonhap News)

 

[Alpha Biz= Kim Jisun] SEOUL, Dec. 9 — Prosecutors investigating the “Homeplus crisis” have questioned Michael Byungju Kim, Chairman of MBK Partners, as a suspect, drawing significant attention to the case’s imminent conclusions.

This development follows the Dec. 2 questioning of Kim Kwang-il, Vice Chairman of MBK Partners and CEO of Homeplus, suggesting that prosecutorial decisions on the case may be forthcoming.

According to legal and industry sources on Dec. 9, the Seoul Central District Prosecutors’ Office’s Anti-Corruption Division 3 (acting chief prosecutor Kim Bong-jin) summoned Chairman Kim on Dec. 8 on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act.

Investigators are focusing on whether MBK’s management was aware of the impending downgrade of Homeplus’s credit rating and whether the process leading up to the issuance of short-term bonds involved any unlawful conduct.

Specifically, prosecutors suspect that MBK and Homeplus may have issued a large volume of short-term bonds despite prior knowledge of a potential downgrade, and subsequently filed for corporate rehabilitation without warning—effectively passing losses onto investors.

Homeplus’s credit rating was downgraded from A3 to A3- on Feb. 28. The company then filed a petition with the court to commence rehabilitation proceedings on Mar. 4.

A core issue under scrutiny is whether MBK and Homeplus were aware of the downgrade risk before Feb. 25, when the credit rating agency issued its first notice. If they solicited bond investments while already aware of the impending downgrade, the act could constitute investor deception. Homeplus sold 82 billion won (KRW 82 billion) in bonds through a securities firm on Feb. 25, before the downgrade.

Prosecutors are closely examining the decision-making process of MBK management, including Chairman Kim, during this period.

According to reporting by the JoongAng Ilbo, prosecutors obtained internal documents from financial authorities that allegedly indicate MBK and Homeplus officials were aware of the likelihood of a downgrade and had been planning the rehabilitation filing in advance.

Authorities have also identified that Homeplus received warnings during meetings with two major credit rating agencies on Feb. 13–14, during which the agencies reportedly cautioned that “downward credit pressure is extremely strong.”

Prosecutors previously conducted search and seizure operations at Homeplus and MBK headquarters on Apr. 28 and later raided Korea Ratings and NICE Investors Service—the agencies responsible for downgrading Homeplus’s credit rating—on May 12.

 

 

 

 

Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)

https://www.alphabiz.co.kr/news/view/1065621767618517
This article is based on global economic content from Alphabiz, which distributes English-language news on Korean markets and companies to international audiences.

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