Prosecutors Summon Chairman Kim Byungjoo and Vice Chairman Kim Kwangil Repeatedly
Negative Impact on Rehabilitation Process...Sale Process Likely to Drag On
Kim Byungju, Chairman of MBK Partners, is responding to a lawmaker's question during the National Assembly's Political Affairs Committee audit on the Fair Trade Commission and the Personal Information Protection Commission held on October 14. On the left is Kim Kwangil, CEO of Homeplus. October 14, 2025 Photo by Kim Hyunmin
The leaders of MBK Partners, who are facing difficulties in the sale process of Homeplus, are being investigated one after another by the prosecution. This is expected to negatively impact Homeplus's rehabilitation proceedings and make it even more difficult to find a buyer, potentially delaying the sale until next year.
Sale Prospects Dim as Major Shareholders Face Legal Risks
According to the investment banking (IB) industry and legal circles on December 11, the Third Anti-Corruption Division of the Seoul Central District Prosecutors' Office (Acting Chief Kim Bongjin) summoned Kim Byungjoo, Chairman of MBK Partners, the previous day as a suspect on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act. This comes just one week after Kim Kwangil, Vice Chairman of MBK Partners and CEO as well as the court-appointed manager of Homeplus, was summoned and investigated on the same charges on December 2.
The prosecution suspects that MBK Partners, the private equity fund (PEF) operator and major shareholder of Homeplus, issued and sold large amounts of short-term bonds despite knowing that Homeplus's credit rating would be downgraded, resulting in losses for investors. In particular, the prosecution believes that MBK Partners planned to file for corporate rehabilitation but intentionally withheld this information from investors, attempting to shift the losses onto them.
The legal risks facing MBK's leadership are expected to add to the burden on Homeplus's rehabilitation process. If corruption or illegal activities by the court-appointed manager are confirmed, the court may revoke or replace the manager's appointment. If the court determines that proper rehabilitation proceedings cannot be conducted, it could even decide to terminate the rehabilitation process itself.
However, in such a case, Homeplus would enter bankruptcy proceedings, making it difficult for the court to make such a decision proactively. An IB industry official explained, "It would be difficult for the court to declare bankruptcy due to public opinion pressure, but negative impacts are inevitable."
With legal risks for the major shareholders mounting, the sale of Homeplus is expected to be further delayed. MBK has sought buyers for Homeplus, but no one has participated in the main bidding process, resulting in several failed attempts.
A Prolonged Battle Is Unavoidable... Possibility of Government-Led Restructuring
Homeplus has announced through a statement that the provisional deadline for the second sale attempt is set for December 29, the date for submitting the rehabilitation plan. Given the current situation, it is unlikely that additional prospective buyers will emerge. If Homeplus requests a delay in the rehabilitation proceedings, the sale process could be prolonged indefinitely. Under current law, rehabilitation proceedings can last up to 18 months. Considering that Homeplus began rehabilitation proceedings on March 4 of this year, the sale could be postponed until as late as September next year.
In this scenario, the losses would be borne entirely by employees and creditors. Suppliers may suffer financial damage due to delayed payments or reduced sales volumes following the start of rehabilitation proceedings, and employees would remain in an unstable situation. Creditors would face significant opportunity costs as their invested funds or loans remain tied up and uncollected.
Given the current situation at Homeplus, the likelihood of a successful sale is considered extremely low. The company has already posted losses for four consecutive years through last year. Last year alone, operating losses amounted to 314.1 billion won, and unpaid taxes reached approximately 90 billion won. Even if the company is sold for more than the rehabilitation claim amount of 2.6691 trillion won, a substantial investment would be required to normalize operations. In particular, Meritz Financial Group is expected to face the greatest concerns. Meritz Financial (including securities, insurance, and capital) lent approximately 1.2166 trillion won to Homeplus in May last year. By May of this year, it had recovered 256.1 billion won, including principal and interest, but about 1 trillion won remains outstanding.
Industry observers suggest that the government may pursue a creditor-led restructuring process, allowing MBK to step out of the public spotlight. This could involve canceling MBK's existing shares, partially writing off debt, and converting some debt into equity. If the government and policy finance institutions become the largest shareholders and implement gradual restructuring, the risk of total closure or mass layoffs could be reduced. For Homeplus employees, negotiating with the government as the new counterpart would increase their bargaining power, while MBK could step back from the center of criticism.
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