Financial Supervisory Service Homeplus TF Begins Unfair Trade and Accounting Review

The Financial Supervisory Service (FSS) has launched an inspection against the major shareholder MBK Partners in relation to the Homeplus incident and has initiated a comprehensive investigation covering unfair trading to accounting audits through a dedicated task force (TF). The plan is to thoroughly uncover various suspicions, including bond fraud issuance.

According to the FSS on the 21st, the Homeplus Incident Response TF, established under Deputy Governor Ham Yong-il of the Capital Markets Division, is currently composed of four teams: ▲Unfair Trading Investigation Team ▲Inspection Team ▲Accounting Audit Team ▲Financial Stability Support Team, conducting related investigations.

Yonhap News

The TF, staffed with experts in investigation, law, accounting, and IT, was formed immediately after FSS Governor Lee Bok-hyun announced the TF launch plan on the 19th and held a kickoff meeting. The TF is investigating whether Homeplus and major shareholder MBK Partners issued commercial papers (CP) and asset-backed short-term electronic bonds (ABSTB) despite prior knowledge of credit rating downgrades, while also starting an investigation into unfair trading related to sales.

Since the previous day, an accounting audit has also begun to verify suspicions of Homeplus violating accounting standards. Specifically, the audit will examine whether Homeplus properly evaluated assets and liabilities on its financial statements.

The FSS emphasized, "This is to minimize public damage through early resolution of the Homeplus incident and to thoroughly uncover various suspicions." If it is confirmed, as suspected by the market, that Homeplus proceeded with fundraising while aware of the rating downgrade and rehabilitation plan, legal punishment is possible for fraudulent transactions, similar to the past Dongyang Group incident. In this regard, since the 13th, the FSS has also been inspecting Shin Young Securities, the lead underwriter, and two credit rating agencies. On the 19th, inspections and unfair trading investigations against MBK Partners commenced.

The TF will operate temporarily until May 31 and may be extended if necessary. Deputy Governor Lee Seung-woo is in charge of overall practical management. The FSS stated, "We will closely monitor Homeplus payment settlement trends and the rehabilitation process, cooperating with related agencies to take necessary stabilization measures," and emphasized, "We will promptly conduct investigations, inspections, and accounting audits to thoroughly uncover related suspicions and strictly take action against illegal activities."