Seoul: The chief of the country's financial watchdog has accused private equity fund MBK Partners Ltd. and its wholly owned retailer Homeplus Co. of preparing for a court rehabilitation scheme well in advance of a rating downgrade, contradicting their claims regarding the timing of their response to financial difficulties.
According to Yonhap News Agency, Lee Bok-hyun, governor of the Financial Supervisory Service (FSS), stated that despite MBK Partners and Homeplus asserting they only considered court-led rehabilitation measures from February 28, following Homeplus' ratings downgrade, evidence suggests they were aware of the impending downgrade and had been preparing for this eventuality for a significant period. This revelation challenges the companies' narrative that Homeplus only sold short-term debts without anticipating any rating reduction.
On March 4, Homeplus entered court-led rehabilitation proceedings, a move that has now come under scrutiny. Lee revealed during a press briefing that the financial watchdog has gathered concrete evidence indicating that Homeplus and MBK Partners were cognizant of the rating cut beforehand, leading to the formal referral of the case to the prosecution for further investigation.
The FSS is committed to cooperating with the prosecution's probe and will continue to scrutinize potential speculation and legal violations connected to the debacle. Lee further criticized MBK Partners for its lack of responsibility, noting that the largest shareholder of Homeplus had not taken decisive actions such as stock cancellation or additional capital injections to mitigate the situation.
In response to the crisis, MBK Partners had previously announced that its chair, Kim Byung-ju, would employ his personal assets to aid suppliers impacted by Homeplus' court-led rehabilitation. Nonetheless, MBK has faced backlash for opting for rehabilitation without pursuing self-recovery initiatives.