Homeplus Major Shareholder MBK Chairman Pledges Personal Funds
No Details on Amount, Timing, or Method Disclosed
Homeplus Union Criticizes: "Trying to Dodge a Pouring Rainstorm"
Political Affairs Committee to Hold Inquiry on the 18th... Chairman Kim Expected to Be Absent
Kim Byung-joo, chairman of MBK Partners, a private equity fund (PEF) operator and major shareholder of Homeplus, declared that he would use his personal funds to resolve the Homeplus crisis, which has entered corporate rehabilitation proceedings. Meanwhile, the political circles and the Homeplus labor union intensified their criticism, calling Kim's decision a 'temporary measure to quell negative public opinion.'
Press conference of Homeplus Labor Union regarding Chairman Byungjoo Kim's personal fund contribution to MBK Partners. Provided by Mart Industry Labor Union Homeplus Branch.
On the 17th, Kim Hyun-jung, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, pointed out at a press conference held at the National Assembly Communication Office, "Yesterday, Chairman Kim Byung-joo announced that he would contribute his personal funds to support payment settlements for small business owners. However, upon closer examination, there is no specific explanation regarding the timing or method, and there is no concrete mention of other damages beyond the payment support for small business owners."
Earlier, MBK stated in a press release issued the previous day, "We will fulfill our social responsibility related to the rehabilitation of Homeplus," and "As part of this, Chairman Kim Byung-joo will prepare financial support to promptly pay the settlement amounts to small business partners expected to face difficulties." However, the exact scale of the personal fund contribution was not disclosed.
Rep. Kim added, "As social criticism intensifies and rigorous investigations by the Financial Supervisory Service and the National Tax Service are anticipated, they are trying to evade responsibility as if 'dodging a pouring rainstorm' by making unilateral promises of personal fund contributions," and "Such unilateral promises cannot absolve MBK of its irresponsible behavior." The National Assembly's Political Affairs Committee plans to hold a special inquiry on the Homeplus issue on the 18th and has requested the attendance of Chairman Kim and Homeplus management. However, Chairman Kim has submitted a letter of absence citing overseas business trips and is unlikely to attend.
Kang Woo-chul, chairman of the Mart Industry Labor Union, criticized, "Chairman Kim, who was requested to appear before the National Assembly tomorrow, did not comply and instead announced a seemingly generous personal fund contribution," adding, "He might even be calculating this as an investment." He further criticized, "MBK failed to fulfill its promise to invest 1 trillion won after acquiring Homeplus and focused only on capital recovery, weakening the company's competitiveness," and "They are attempting a 'new concept eat-and-run' by shifting the responsibility they should bear onto numerous stakeholders, including workers, by invoking the unfamiliar concept of proactive corporate rehabilitation."
A banner condemning the major shareholder MBK is hung in front of a Homeplus store in Seoul. Photo by Yonhap News
After Chairman Kim's announcement of personal fund contributions, Homeplus stated, "The shareholder company has decided to provide financial support to Homeplus so that it can promptly pay the claims of small business owners facing financial difficulties," and "We are currently estimating the required amount for the payment of small business owners' claims."
The amount of commercial claims that must be settled monthly, including payments to partner suppliers, tenants (resident businesses), and employee salaries, is estimated to be around 500 billion won. Separately, 345.7 billion won in payments for goods and services from partners from December last year to last month must be repaid. This amount is classified as 'rehabilitation claims' incurred before the start of rehabilitation proceedings on the 12th of last month, 20 days prior to the commencement, and funds are being disbursed sequentially with court approval. Adding 112.7 billion won in settlement payments to tenant store owners for January and February this year, the total overdue repayment amount rises to approximately 460 billion won.
Among these, the amount of commercial claims already paid by Homeplus as of this morning is 351 billion won. Additionally, individual investors who invested about 300 billion won in asset-backed short-term bonds (ABSTB) issued in large volumes despite Homeplus being aware of the possibility of a credit rating downgrade beforehand are demanding that these bonds be recognized as commercial claims and given priority repayment.
Homeplus stated, "Investors in securitized bonds (including ABSTB) issued by securities companies are not direct creditors of our company, but the final repayment responsibility lies with us," and "We will make every effort to ensure that these claims are fully repaid according to the rehabilitation proceedings in consultation with the relevant securities companies."
Industry insiders estimate that considering these amounts overall, Homeplus will need at least 100 billion won to extinguish the immediate crisis and up to over 1 trillion won to normalize operations. The Mart Union Homeplus branch, in a statement released today, urged, "Chairman Kim Byung-joo should immediately halt the rehabilitation proceedings and normalize the company through sufficient personal fund contributions rather than temporary measures," and "He must promptly offer a sincere apology to the public and workers who have suffered damages and present concrete solutions."
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