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MBK chair slammed for skipping parliamentary hearing on Homeplus debacle

Published: 18 Mar. 2025, 18:50 Updated: 18 Mar. 2025, 19:05

KIM JU-YEON
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Homeplus CEO and MBK Partners Vice Chairman Kim Kwang-il finishes his remarks to the National Policy Committee in a hearing on Homeplus's management and finances at the National Assembly building in western Seoul on March 18. [NEWS1]

MBK Partners Chairman Michael ByungJu Kim failed to attend a parliamentary hearing on Tuesday that he was summoned to over Homeplus’s liquidity crisis. His absence was noted by lawmakers as the government and labor unions continue to mount pressure over his firm’s management of the retail giant and the chairman’s pledge to use his own funds to revive the ailing supermarket chain.

Homeplus co-CEOs Kim Kwang-il and Jo Ju-yeon instead answered questions from the National Policy Committee on the company's affairs. The supermarket chain entered corporate rehabilitation on March 4, citing potential liquidity issues stemming from a downgrade of their credit rating in February.

MBK Partners, Homeplus’s majority stakeholder, is accused by investors of knowingly issuing short-term financial bonds up until its corporate rehabilitation filing date despite anticipating the rating drop.

Homeplus CEO and MBK Partners Vice Chairman Kim Kwang-il once again denied that the filing was premeditated, and that they had not anticipated the downgrade.

“We applied for corporate rehabilitation to prevent bankruptcy,” Kim said.

People Power Party (PPP) Rep. Lee Hun-seung urged the executives to make fundamental changes, including in management, to improve the firm's finances.

“Homeplus is currently shown to have continuously recorded losses but is only focusing on securing cash and paying creditors by selling off branches,” Lee said.

“It is not appropriate to only plan the asset sales without changes to management,” he said.

Homeplus made around 4.11 trillion won ($2.8 billion) by selling 28 branches and storage centers between 2016 to 2024, according to data submitted to Rep. Lee.

The lawmaker pointed out that while Homeplus said it would use the proceeds from the real estate sales to pay debts and operate the company, finances had deteriorated despite the sales, with the supermarket chain relying more on borrowings since 2020.
Data separately compiled by fellow PPP Rep. Kim Jae-sub showed that MBK Partners pocketed around 1.86 trillion won in a sale-leaseback agreement from 2016 to 2020.

Lawmakers across the political aisle criticized Kim for missing the hearing. The chairman said four days in advance that he would not attend, saying he had to go on a business trip to China on Monday.

“I am involved in MBK Partners’ funding and investment process but not involved in managing the individual portfolios of companies that have already been invested in, so I am concerned that I will not be able to provide sufficient answers,” he said in a statement submitted to the committee.

“We will continue to hold hearings until [Kim] comes to the National Assembly. If that is insufficient, an Assembly-led probe must be launched,” PPP Rep. Kang Min-guk said.

BY KIM JU-YEON [[email protected]]