Confirmation Hearing for Financial Services Commission Chairman Nominee
Lee Eokwon Pledges Swift Review of MBK Partners Probes
Considers Severe Sanctions Amid "Homeplus Incident" Investigation
Lee Eokwon, nominee for chairman of the Financial Services Commission, reiterated on September 2 that after taking office, he would "promptly review" both the financial authorities' investigation and the prosecution's probe into MBK Partners, the major shareholder, in connection with the so-called "Homeplus incident." When asked whether he would rule out imposing a disciplinary measure as severe as an "institutional warning" or higher, he responded in principle that it would depend on the level of illegality, but confirmed that he would treat the matter seriously.
Appearing at the confirmation hearing held by the National Assembly's Committee on Economy and Finance, Lee responded to questions about Homeplus by stating, "I understand that the prosecution is currently investigating issues related to the bond prospectus and fraudulent transactions," he said.
Lee Eokwon, nominee for the Financial Services Commission chairman, is talking with officials at the confirmation hearing held by the National Assembly's Committee on Economy and Finance on September 2, 2025. Photo by Kim Hyunmin
Due to clashes between ruling and opposition parties over the restructuring of the financial authorities, the hearing was resumed after a morning recess. From the very first question, concerns were raised that "the previous chairman of the Financial Services Commission used the prosecution's investigation as an excuse not to take action against MBK Partners, which ultimately led to the feared wave of Homeplus store closures becoming a reality" (Assemblyman Kim Namgeun of the Democratic Party of Korea).
In response, Lee said, "As the case was handed over to the prosecution, it became an inter-agency matter and is now being handled by the prosecution," adding, "For other violations of the Capital Markets Act, I understand that the Financial Supervisory Service is conducting its own investigation."
The Financial Supervisory Service, which is under the oversight of the Financial Services Commission, has recently begun administrative sanction procedures against MBK Partners in earnest following the appointment of its new governor, Lee Chanjin. After deliberation by the Sanctions Review Committee of the Financial Supervisory Service, the final decision rests with the Financial Services Commission. The levels of sanctions are, in order: institutional caution, institutional warning, business suspension, and license revocation.
In response to a question from Assemblywoman Kim Hyunjung of the Democratic Party of Korea about whether he was considering a sanction of institutional warning or higher, Lee replied, "As the Financial Supervisory Service is currently handling the matter, it is difficult for me to answer," and added, "The Financial Supervisory Service will determine the appropriate level based on the severity of the violation, and ultimately, the Securities and Futures Commission will impose the corresponding sanction."
When further asked whether, as nominee for chairman, he was not ruling out a sanction of institutional warning or higher, Lee answered, "I have not yet seen the results," but emphasized that he would monitor the situation closely. If a severe sanction such as an institutional warning or higher is imposed, it could lead to the suspension or cancellation of the selection process for delegated asset managers (PGs) by limited partners such as the National Pension Service. The financial authorities have been examining the possibility that the interests of limited partners, including the National Pension Service, which invested 582.6 billion won, may have been harmed when the redemption rights conditions for redeemable convertible preferred shares (RCPS) were changed in favor of Homeplus at the time of its credit rating downgrade.
Previously, on August 31, Lee stated in a written response to the National Assembly's confirmation hearing, regarding the Homeplus incident, "Some behaviors of private equity funds (PEFs) revealed in recent issues do not meet the expectations of the market and the public." This was interpreted as both a criticism of MBK Partners and a signal that reforms to the private equity fund system would be pursued immediately after he takes office.
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