Prosecution Requests Arrest Warrants for Four Including MBK Chairman Kim Byungjoo in 'Homeplus Case'

Yonhap News Agency

The prosecution investigating the 'Homeplus case' has moved to secure the custody of MBK Partners Chairman Kim Byungjoo and Vice Chairman Kim Kwangil (Co-CEO of Homeplus), as well as other members of the management team.

According to legal sources, the Third Anti-Corruption Investigation Division of the Seoul Central District Prosecutors' Office (Acting Chief Prosecutor Kim Bongjin) requested arrest warrants on January 7 for Chairman Kim, Vice Chairman Kim, and two others on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act.

They are accused of issuing a large volume of Asset-Backed Short-Term Bonds (ABSTB) despite anticipating a downgrade in Homeplus's credit rating, and then abruptly filing for corporate rehabilitation, causing losses to investors.

Korea Investors Service downgraded Homeplus's credit rating from 'A3' to 'A3-' on February 28 last year. Just four days later, on March 4, Homeplus filed for corporate rehabilitation (court receivership) with the Seoul Bankruptcy Court.

Receiving the case from the Financial Supervisory Service under a fast-track (emergency action) process, the prosecution launched a full-scale investigation in April last year by conducting search and seizure operations at the headquarters of Homeplus and MBK Partners, as well as the residences of Chairman Kim, Vice Chairman Kim, and Co-CEO Cho Jooyeon of Homeplus. At the end of last year, Vice Chairman Kim and Chairman Kim were summoned as suspects and questioned in succession.