Key Executives Including MBK Chairman Kim Byungjoo Involved
Financial authorities are expected to refer those involved in the 'Homeplus incident' to the prosecution early this week. As authorities have reportedly uncovered various indications that Homeplus issued short-term bonds while preparing for corporate rehabilitation, a full-scale investigation by prosecutors is also anticipated.
According to financial authorities and industry sources on April 20, the Financial Services Commission plans to notify the prosecution of allegations of fraudulent and unfair trading by Homeplus and its major shareholder MBK Partners' management through an emergency measure (fast track) by the Securities and Futures Commission early this week.
It is believed that the notification to the prosecution will likely take place before the regular meeting of the Securities and Futures Commission scheduled for April 23.
The individuals expected to be referred to the prosecution include Kim Byungjoo, Chairman of MBK Partners; Kim Kwangil, Vice Chairman of MBK and Co-CEO of Homeplus; and Cho Jooyeon, CEO of Homeplus.
Financial authorities have been focusing their investigation on suspicions of fraudulent and unfair trading, alleging that Homeplus and MBK Partners concealed their advance preparations for filing for corporate rehabilitation while issuing short-term bonds.
MBK Partners claims that it began preparing for a corporate rehabilitation filing after Homeplus's credit rating was downgraded on February 28. However, financial authorities view this as a false statement.
In addition, financial authorities have reportedly identified indications that Homeplus and MBK Partners' management discussed the possibility of a credit downgrade even before the downgrade occurred.
Since financial debts are frozen upon filing for corporate rehabilitation, issuing bonds or similar instruments while a rehabilitation filing is planned can be considered a deceptive act that misleads investors and is subject to criminal penalties.
According to materials submitted by the Financial Supervisory Service to the National Assembly's Political Affairs Committee, as of March 3, the total sales amount of Homeplus-issued commercial paper (CP), short-term bonds, and asset-backed short-term bonds (ABSTB) based on card receivables was 589.9 billion won.
Of this amount, 197 billion won was sold to individuals and 311.9 billion won to general corporations.
Notably, on February 25, just before the credit rating downgrade, ABSTB issuance alone reached 82 billion won in a single day, sparking controversy.
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