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FSS to investigate MBK Partners over Homeplus rehabilitation filing

Published: 19 Mar. 2025, 11:34 Updated: 19 Mar. 2025, 18:20

SHIN HA-NEE
[email protected]

Financial Supervisory Service Gov. Lee Bok-hyun speaks during a press conference in western Seoul on March 19. [YONHAP]

The Financial Supervisory Service (FSS) launched an investigation into MBK Partners, Korea’s largest private equity firm, following Homeplus' recent court-led rehabilitation filing.

Homeplus filed for rehabilitation on March 4, citing a potential liquidity crunch, after its credit ratings were downgraded. The retail chain had secured funding from investors shortly before filing for receivership, raising questions of whether the companies were aware of the impending downgrade by the time of the bond issuance. Critics also allege that MBK drove Homeplus to seek rehabilitation, including potential debt cancellation, without making sufficient efforts to rescue the retail chain.

A newly established task force will investigate whether the discount retail chain and its parent company were aware of the credit rating downgrade when issuing commercial papers and short-term corporate bonds to raise funds, which could constitute fraud.

The probe, which began Wednesday afternoon and will continue through the first half of this year, marks the first time the financial watchdog has investigated a private equity firm.

“If MBK is sincere, it should actively cooperate for the investigation,” said FSS Gov. Lee Bok-hyun during a press briefing on Wednesday morning.

Lee also criticized MBK Partners Chairman Michael ByungJu Kim for failing to attend a parliamentary hearing on Tuesday.

“It is very regretful that Kim was absent from yesterday’s hearing,” said Lee.

During Wednesday’s briefing, the governor once again voiced a strong opinion on the recently passed revision on the Commercial Act, opposing a potential dismissal of the bill. Lee proposed an open debate with the Federation of Korean Industries, a business lobby strongly opposing the revision.

“I’m putting everything on the line for the progress of the capital market — so I want to hear what critiques are risking,” said Lee.

The liberal Democratic Party railroaded the bill, which is designed to expand the obligation of corporate board directors to enhance shareholder protection, on March 13. The People Power Party and business lobbies have been demanding the acting president to reject the bill.

While Lee previously expressed his reservations with the Commercial Act revision — instead supporting the government-proposed revision of the Capital Markets Act — he still defended the enactment of the bill, indicating that it is a step forward, albeit an imperfect one.

Updated, March 19: Added comments from Lee and details on the Commercial Act revision.

BY SHIN HA-NEE [[email protected]]