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Homeplus recovery left adrift amid legal battles

Published: 15 Jan. 2026, 00:00

The entrance to Homeplus's Yeongdeungpo branch in Yeongdeungpo District, western Seoul, is seen on March 4, 2025. [NEWS1]

All arrest warrants sought by prosecutors against senior executives of Homeplus — including Kim Byung-ju, one of the founders of MBK Partners — were denied by the court on Wednesday. The court said that the damage caused by the case appeared serious, but the evidence submitted so far was not enough to justify detention. Kim and other executives are accused of issuing large volumes of asset-backed short-term bonds despite anticipating a downgrade in Homeplus's credit rating, which allegedly caused losses for investors. Three executives also face charges related to accounting fraud involving roughly 1 trillion won ($679 million) and manipulation of audit reports. These allegations must be thoroughly examined through further investigation and trial.

The more pressing issue, however, is the stalled effort to rehabilitate Homeplus itself. After entering court-led rehabilitation last March, the retailer sought to sell the business, extending the deadline for submitting a rehabilitation plan five times. Those efforts collapsed, prompting a shift toward restructuring, a separate sale of its supermarkets and closures. Five branches, including those in Gayang and Ilsan, have already shut down, and another five, including the Siheung store, are set to do the same by the end of this month. Even now, it remains unclear whether the court will approve the revised rehabilitation plan.

Homeplus, the country’s second-largest big-box retailer, directly employs about 20,000 people, more than Posco or Korean Air. When indirect employment at tenant shops and supplier companies is included, as many as 100,000 livelihoods depend on the company. Its largest shareholder, MBK Partners, and its management are responsible for such a business being pushed to the brink of liquidation.

When MBK acquired Homeplus in 2015, it financed a substantial portion of the deal by borrowing against the retailer's own assets. After the acquisition, prominent stores were sold off one by one to reduce interest burdens, a strategy widely criticized at the time as emblematic of a ruthless private equity playbook. The result was a steady erosion of Homeplus's competitiveness. Calls for MBK to demonstrate genuine responsibility and meaningful self-rescue efforts are well-founded.

The government also bears responsibility for failing to properly monitor and restrain such “eat-and-run” management practices by private equity firms. Political leaders, in particular, should reflect on their role. The Distribution Industry Development Act, which restricts operating hours and mandatory biweekly closures for large retailers, expired last November but was extended by the National Assembly. While justified as protecting traditional markets, the law has largely served electoral calculations. Big-box retailers such as Homeplus have shrunk while Coupang, largely free from such constraints, has expanded.

Rather than pressuring entities like the National Agricultural Cooperative Federation to take over Homeplus, lawmakers should first dismantle these outdated regulations that stand in the way of recovery. The first court deadline in the rehabilitation process is March 3. Time is running out. MBK, the government and the political establishment must act with greater urgency to prevent a collapse with far-reaching social costs.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.