"Homeplus Files for Rehabilitation, Like Martial Law... Kim Byung-joo Must Attend National Assembly"

Homeplus ABSTB Victims' Meeting
"Chairman Kim's Personal Fund Contribution Lacks Specifics"
Key Issue Is Recognition as Commercial Claims, Not Just Mis-selling

Kim Byung-joo, chairman of MBK Partners, has expressed his willingness to contribute personal funds to resolve the 'Homeplus incident,' but criticism continues unabated. There are concerns about the lack of specific details regarding the scale and plan of the financial resources. Despite repeated demands from the National Assembly's Political Affairs Committee for Chairman Kim to appear, he has not responded, and the conflict is expected to deepen.

On the 17th, Shin Jang-sik, a member of the Innovation Party for Korea, said at the 'Emergency Meeting for Victims of Homeplus Product Purchase Asset-Backed Short-Term Bonds (ABSTB)' held at the National Assembly Members' Office Building in Yeouido, Seoul, "The estimated damage exceeds 400 billion won for the securitized short-term bonds alone, and when including other short-term bonds such as commercial paper (CP), it far exceeds 600 billion won. Yet, MBK's attitude is to simply follow the court's decision without any special measures." He added, "Chairman Kim must appear before the National Assembly tomorrow and present clear relief measures."

On the 17th, a meeting of victims of Homeplus product purchase fraud (ABSTB) was held at the National Assembly Members' Office Building in Yeouido, Seoul. Photo by Yonhap News.

Representative Shin described Homeplus's initiation of preemptive rehabilitation proceedings on the 4th as "like declaring martial law." He pointed out that the time from Homeplus's credit rating downgrade to the start of rehabilitation proceedings was abnormally short. He said, "Homeplus issued 373.9 billion won worth of short-term bonds over three months starting last December, and even on the 25th of last month, when they claimed to have first recognized the credit rating downgrade, they issued about 82 billion won worth of securitized short-term bonds." He added, "If they issued bonds knowing about the credit rating downgrade in advance, there is suspicion that it would be difficult to avoid criminal responsibility."

Kim Nam-geun, a member of the Democratic Party of Korea, also said, "Considering the documents to be prepared and the large law firm personnel involved, applying for rehabilitation proceedings after a credit rating downgrade should take at least two months." He added, "It is hard to believe that Homeplus applied for rehabilitation within 2-3 days. I suspect that they had been preparing for rehabilitation since at least January or February and had been selling these short-term bonds during that process." He further stated, "If Shin Young Securities sold short-term bonds knowing Homeplus's credit status was very poor, it constitutes mis-selling and they should bear corresponding responsibility."

As of the 3rd, the outstanding balance of Homeplus's short-term bonds, including commercial paper (CP), card payment-based asset-backed securities (ABSTB), and short-term bonds, totaled 594.9 billion won, of which 207.5 billion won was sold to individual investors. At the meeting, stories were shared from victims who invested in Homeplus securitized short-term bonds on the recommendation of securities company employees but are now suffering because they cannot recover their money.

Han Mi-young (pseudonym), who assists with fund management at a small business run by her husband, said, "At the end of January, I invested about 1 billion won in Homeplus short-term bond products under the company name through a usually kind and trustworthy Hana Securities employee, but not being able to get the money back makes every day feel like hell and is very difficult." She lamented, "I was told that Homeplus guaranteed credit and MBK held 100% equity, so it was stable enough, but I never heard that if Homeplus's credit rating was A3 and dropped by just one level, all the money would be frozen."

Another victim, Hwang In-seong, said, "I have worked for over 30 years and saved 900 million won for retirement, but with the rehabilitation application on March 4th, all of it is about to be lost." He added, "If it is not recognized as a commercial claim, it may take up to 10 years to receive payments in installments, and only up to 10% of the original amount may be compensated. I don't know if I will ever get all my money back before I die." Other cases followed, where victims were misled by securities companies emphasizing the short maturity of the bonds and Hyundai Card's 100% payment guarantee, only to suffer losses after subscribing to the products.

However, there were suggestions that the focus of the incident should not be solely on whether securities companies engaged in mis-selling. Representative Shin said, "While securities company employees may be the most resented, even if mis-selling by securities companies is recognized, investors can only recover about 50% of their losses." He emphasized that the core issue is whether Homeplus securitized short-term bonds are recognized as commercial claims rather than financial claims.

Min Byung-duk, a member of the Democratic Party of Korea, diagnosed, "At first glance, Homeplus short-term bonds may appear to be financial claims, but Homeplus used financial techniques to delay payment of goods, so the essence is commercial claims." He added, "Chairman Kim Byung-joo announced his willingness to contribute personal funds, but limited compensation to small business owners and did not disclose the specific amount. To demonstrate sincerity in rehabilitation, the scale of financial resources should be at least 2 trillion won."

The National Assembly plans to conduct a full Political Affairs Committee meeting on the 18th to question Chairman Kim about his personal fund contribution and other issues related to the Homeplus incident. However, Chairman Kim has submitted a notice of absence citing a business trip to Hong Kong. Representative Kim stated, "If Chairman Kim Byung-joo does not appear by tomorrow, the ruling and opposition parties will agree to hold him criminally accountable and pursue a separate hearing on MBK."