On the 26th, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), strongly criticized MBK Partners, the private equity fund (PEF) management company at the center of the Homeplus incident, saying, "I don't trust them. They are cutting someone else's bone, not their own." However, he also emphasized that while thoroughly investigating the suspicions surrounding MBK, improvements to the PEF system should be made cautiously so as not to undermine the fundamental market functions. Regarding the allegations of stock price manipulation involving Sambu Construction, he plans to complete the investigation by next month.
"Promise to repay 400 billion won ABSTB is a lie... MBK made empty promises"
Governor Lee appeared on MBC Radio's 'Kim Jong-bae's Focus' that morning and stated, "I am in a position where I cannot trust MBK, the major shareholder of Homeplus," adding, "The claim that they will guarantee the principal of the 400 billion won securitized bond (Asset-Backed Short-Term Bond, ABSTB) seems to be a lie." He pointed out, "It is unclear whether the repayment will be made now, in five years, or ten years," and said, "If they had the liquidity to guarantee the principal quickly, they would not have filed for rehabilitation."
This was a critique of the fact that last week Homeplus and MBK classified the controversial ABSTB as trade receivables and promised normal repayment but did not provide specific repayment methods or schedules. Governor Lee also expressed strong suspicion about MBK rushing to file for corporate rehabilitation immediately after Homeplus's credit rating was downgraded, emphasizing, "This will be revealed during the investigation." The FSS began an investigation into MBK last week and launched a task force (TF) related to Homeplus to conduct a comprehensive probe.
Governor Lee also pressured MBK, the major shareholder, to take responsibility for Homeplus's management failure and share the pain. Referring to the past Taeyoung Construction incident, he said, "The market trusted Taeyoung Construction because the major shareholder and the company shared the pain while undergoing restructuring," and directly criticized MBK by saying, "In MBK's case, they are cutting someone else's bone (investors, etc.), not their own."
However, Governor Lee also expressed caution about the growing calls for regulation across the PEF sector triggered by this incident. He said, "Institutional PEFs have played a positive role in industrial restructuring during economic volatility and have greatly helped the reorganization of the Korean economy," adding, "While reforming the PEF system itself might feel satisfying in the short term, it is a matter that requires careful consideration from the perspective of the entire market." He continued, "The ones at fault are MBK, specifically a few decision-makers. Their responsibility and the truth must be strongly pursued," but also said, "Responsibility for bad deals and the PEF system itself should be viewed separately."
"Sambu Construction to be handled preferably within April... No suspicious signs involving Kim Gun-hee at this stage"
He also stated that the investigation into the stock price manipulation allegations involving Sambu Construction aims to be completed within April. Governor Lee said, "We are reviewing all accounts related to the main suspects, including Kim Gun-hee," and added, "We aim to handle it preferably within April." He explained, "Once the FSS wraps up the case, it will coordinate with the Financial Services Commission's Securities and Futures Commission (SFC), and if it goes through the fast track, it will also consult with the prosecution. These procedures are either underway or planned."
Currently, the FSS is tracking the flow of funds related to the 10 billion won-scale profits made by major shareholders and stakeholders of Sambu Construction, which attracted attention as a Ukraine reconstruction-themed stock before allegations of stock price manipulation arose. The opposition party has raised suspicions involving Lee Jong-ho, former CEO of Black Pearl Investment, a key figure in the Deutsche Motors stock price manipulation case and the account manager for Kim Gun-hee.
Regarding this, Governor Lee said, "The materials related to Lee Jong-ho were missing from the data transferred from the Korea Exchange," and added, "We are expanding the investigation to include parts not received from the exchange." In response to definitive statements made earlier at the National Assembly's Political Affairs Committee that Kim Gun-hee and former Minister of Land, Infrastructure and Transport Won Hee-ryong are unrelated to the allegations, he said, "It is true that we are analyzing the related account data, but at this stage of the investigation, no connection has been found." He further added, "Due to the nature of investigations, even if something is confirmed now, its significance may change later."
On the proposed amendment to the Commercial Act with a threat to resign: "The law has already passed; realistic judgment is needed"
On the same day, Governor Lee expressed concerns about the potential impact on the overall capital market if the government exercises its right to request reconsideration (veto) of the amendment to the Commercial Act. With about two months left in his term, he has publicly opposed the exercise of the veto power on the amendment, even stating he would stake his position. The deadline for the reconsideration request on the amendment is April 5.
Governor Lee said, "On April 2, the issue of mutual tariffs will arise, and around early April, there could be various situations such as political uncertainty," adding, "If the veto is exercised at such an important time, the government's commitment to protecting shareholder value will be questioned, which could affect the stock and foreign exchange markets." He argued that the government's initial focus on amending the Capital Markets Act instead of the Commercial Act was a realistic consideration, stating, "Now is not about which law is better, but about making a judgment given that the law has already passed."
Regarding whether Acting Prime Minister Han Duck-soo will exercise the veto, he said, "That is a matter for the acting prime minister to decide." When asked if he would stake his position if the veto is exercised, he avoided a direct answer and said, "This week, we will send an official document regarding the exercise of the reconsideration right to the Prime Minister's Office, Ministry of Strategy and Finance, and Financial Services Commission."
Additionally, Governor Lee downplayed the significance of the Financial Services Commission's recent convening of household loan officers from commercial banks to tighten lending. He explained, "We do not intervene in the market by telling banks to raise or lower interest rates by a certain percentage," adding, "However, we do check whether there are any issues in the transmission of market interest rates, especially as the base rate has recently been lowered." He continued, "Yesterday's issue seemed sensitive due to Seoul's land transaction permit system (Toheoje) issue," and said, "The Financial Services Commission and we regularly meet with banks' credit officers to review the situation, so there is no need to assign great significance to yesterday's event."
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