Kim Yongbeom, Meritz Vice Chairman, Will Not Testify at National Assembly Audit

Political Affairs Committee Withdraws Witness Summons for October 21 Appearance

Kim Yongbeom, Vice Chairman of Meritz Financial Group, was excluded from the list of witnesses for the National Assembly’s Political Affairs Committee audit scheduled for October 21.

According to the industry, the Political Affairs Committee withdrew its request for Kim to testify as a witness on the morning of the same day. He had been the only financial holding group executive scheduled to appear at the audit, but this did not materialize. It is interpreted that the National Assembly accepted Meritz Financial Group’s active explanations and requests.

Initially, the committee had decided to call Kim as a witness regarding joint guarantees for real estate project financing (PF). Previously, the Financial Supervisory Service had received complaints from the construction industry that excessive fees or interest rates were being demanded during PF loan maturity extensions, and subsequently launched an inspection into Meritz Fire & Marine Insurance and others. It was reported that the authorities were investigating whether Meritz Fire & Marine Insurance and related companies abused their superior position by forcing high fees in exchange for extending PF loans. During the 2023 audit, lawmakers from both parties had also strongly criticized Meritz Securities for high interest rates on real estate PF loans.

There were also plans to criticize Homeplus in connection with the real estate PF joint guarantees. In May last year, Meritz Financial Group provided a three-year loan of 1.3 trillion won at an 8% annual interest rate, using 63 Homeplus stores as collateral. By May this year, Meritz Financial had recovered a total of 256.1 billion won, including one year’s worth of interest, various fees, and approximately 100 billion won in principal. The issue was raised that, in addition to the nominal interest rate, Meritz Financial Group earned high short-term profits through withdrawal and handling fees.

In fact, Meritz Financial Group reportedly included an “imputed interest based on internal rate of return (IRR)” of 86.1 billion won in its filing for unrepaid principal in the rehabilitation claim form. According to industry sources, this 86.1 billion won was calculated by retroactively applying the internal target return rate (11.5-13%) on the assumption that an “event of default (EOD)” occurred as of the Homeplus rehabilitation filing date, March 4, 2025.

An investment banking industry official commented, “The political community is dissatisfied with MBK’s plan to support Homeplus with additional funds, and feels that Meritz Financial Group, as the main creditor, is waging a public opinion campaign targeting MBK rather than cooperating with normalization efforts such as a management rights sale. They may also have been preparing to intensively criticize the former Meritz Fire & Marine Insurance CEO over allegations of insider trading based on undisclosed information.”

Previously, after MBK Partners issued a public apology at the end of last month, Meritz Financial Group released a document titled “Key Issues Regarding MBK & Homeplus Rehabilitation” a few days later. In this document, Meritz strongly criticized MBK, stating, “MBK’s plan to support Homeplus with additional funds is not substantive,” and described the situation as “the harm of private equity funds, where profits are privatized and losses are socialized.”