Investors Breathe Easier with Homeplus as 'Recognition of Commercial Claims'... Securities Firms Also Relieved

Homeplus investors and related securities firms have breathed a sigh of relief as the asset-backed short-term electronic bonds (ABSTB) issued just before the corporate rehabilitation procedure were classified as 'trade receivables.' Until now, if these bonds had not been recognized as trade receivables, investors would have borne total losses, and securities firms were expected to face controversies and legal battles over 'mis-selling.' However, investors are concerned that Homeplus has not presented a concrete repayment plan or schedule.

Officials from the Emergency Countermeasures Committee for Victims of Homeplus Merchandise Purchase Bond Damage held a press conference titled "MBK Chairman Kim Byung-joo Homeplus Securitization Electronic Short-Term Bond Principal Refund Demand" in front of MBK Partners in Jongno-gu, Seoul on the 19th. 2025.3.19 Yonhap News Photo by Yonhap

According to the Financial Supervisory Service's data on the 21st, the issuance scale of the controversial Homeplus securitized bonds amounts to 401.9 billion KRW, of which individual investors purchased 177.7 billion KRW, accounting for 44% of the total. These bonds were issued based on credit card payments made to Homeplus and have characteristics of both financial debt and trade debt. Within the financial industry, opinions had been divided on whether these could be recognized as trade receivables eligible for normal repayment.

In this situation, when Homeplus announced that it had decided to recognize the 461.8 billion KRW balance of purchase debt securitization (card payments), which underpins the securitized bonds, as trade receivables, ABSTB investors welcomed the move. They had argued that since ABSTB represents claims for Homeplus's merchandise purchases, it should be classified as trade receivables and repaid normally.

Shinyoung Securities, the securities firm underwriting the securitized bonds, and other selling securities firms also appear relieved. Amid allegations of mis-selling for failing to properly inform investors of the risks surrounding Homeplus ABSTB, the worst-case scenario of investors' losses becoming a reality has been averted for now.

The industry’s blame game is also expected to ease somewhat. Shinyoung Securities, which solely underwrote the Homeplus ABSTB issuance and sold it to investors and other securities firms, had even threatened criminal charges, claiming that Homeplus issued ABSTB despite being fully aware of the possibility of a credit rating downgrade. An industry insider said, "If ABSTB had not been recognized as trade receivables and investor losses increased, legal battles over responsibility would have inevitably expanded not only between Shinyoung Securities, Homeplus, and MBK Partners but also between Shinyoung Securities and other selling securities firms."

However, among investors, suspicions have been raised regarding Homeplus's announcement that it would prevent damage to bona fide investors 'according to the rehabilitation procedure' without disclosing specific repayment methods or schedules. The 'Emergency Countermeasures Committee for Victims of Homeplus Merchandise Purchase Electronic Bonds (Emergency Committee),' composed of ABSTB investors, stated, "We welcome the decision to treat the entire ABSTB bonds as trade receivables with priority repayment," but added, "(Since there are no specific details) further scrutiny is necessary."

The Emergency Committee plans to hold a meeting with Homeplus co-CEOs early next week to verify the sincerity and willingness to implement the recent announcement. They are also demanding detailed disclosure of the scale and use of funds related to Chairman Kim Byung-joo of MBK Partners, Homeplus's major shareholder, who pledged to contribute personal funds.

Separately from Homeplus's decision, financial authorities, who have launched inspections targeting Shinyoung Securities and MBK Partners, intend to thoroughly investigate all suspicions surrounding the incident, including fraudulent bond issuance, through a comprehensive investigation. The Homeplus Incident Response Task Force under Deputy Governor Ham Yong-il of the Capital Market Division is currently conducting related investigations through four teams: ▲Unfair Trade Investigation Team ▲Inspection Team ▲Accounting Audit Team ▲Financial Stability Support Team.

The Task Force is investigating whether Homeplus and major shareholder MBK Partners proceeded with issuing CP and asset-backed ABSTB despite prior knowledge of credit rating downgrades, and has also initiated an unfair trade investigation related to bond issuance and sales. The focus is expected to be on whether securities firms engaged in mis-selling. Additionally, since the day before, the Task Force has started an accounting review to verify allegations of Homeplus's violations of accounting standards.