Seoul Central District Prosecutors' Office Conducts Search and Seizure
at MBK Partners and Homeplus Headquarters Over Alleged Bond Misconduct
On April 28, the Third Anti-Corruption Investigation Division of the Seoul Central District Prosecutors' Office, led by Chief Prosecutor Lee Seunghak, conducted a search and seizure at the headquarters of Homeplus in Gangseo-gu, Seoul, as well as at the headquarters of Homeplus's major shareholder MBK Partners in Jongno-gu, in connection with allegations of "passing on dishonored promissory notes." The prosecution secured documents related to Homeplus's corporate rehabilitation application and bond issuance.
The prosecution suspects that the management of Homeplus and MBK issued and sold large amounts of short-term bonds, causing losses to investors, despite being aware of Homeplus's declining credit rating. Homeplus's credit rating, which was previously 'A3', was downgraded to 'A3-', one notch above speculative grade (B), on February 28. Four days later, on March 4, the company filed for commencement of rehabilitation proceedings with the Seoul Bankruptcy Court.
The prosecution suspects that the management knowingly recruited investors and passed on the bonds despite being aware of the impending credit rating downgrade. When a company files for rehabilitation proceedings, its financial debts are frozen, and it is not required to pay interest until the process is completed. On February 25, Homeplus sold 82.9 billion won worth of bonds through Shin Young Securities.
In relation to this, the Securities and Futures Commission under the Financial Services Commission referred the case to the prosecution on April 21 through an emergency fast-track measure. On April 25, Lee Bokhyun, Governor of the Financial Supervisory Service, held a press conference and stated, "We have secured concrete evidence that MBK and Homeplus were aware of the impending credit rating downgrade in advance and had planned the corporate rehabilitation application for a considerable period of time."
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