MBK: "Chairman Kim Byungju Not Involved in Homeplus Accounting Matters"

"Prosecution Interprets Legitimate Accounting Treatments as Problematic"

On January 12, MBK Partners stated that Chairman Kim Byungju is not involved in the Homeplus accounting matter.

In a statement released that day, MBK explained, "The appropriateness of accounting treatment should be determined according to the accounting standards and procedures at the corporate level, and linking this to shareholder responsibility is inconsistent with both the facts and accounting practices."

Kim Byungju, Chairman of MBK Partners, is responding to lawmakers' questions at the National Assembly's Political Affairs Committee audit on the Fair Trade Commission and the Personal Information Protection Commission held on the 14th. On the left is Kim Kwangil, CEO of Homeplus. October 14, 2025 Photo by Kim Hyunmin

The prosecution believes that MBK, the majority shareholder of Homeplus, engaged in large-scale accounting fraud and applied for corporate rehabilitation based on manipulated financial statements. As a result, arrest warrants have been requested for key figures at MBK Partners and Homeplus, including Chairman Kim and Vice Chairman Kim Kwangil.

Additionally, MBK emphasized, "Both the conversion of redeemable convertible preferred shares (RCPS) issued by Homeplus into equity and the revaluation of land assets were legitimate accounting treatments conducted in accordance with relevant accounting standards."

MBK further stated, "The RCPS capital conversion was carried out in compliance with applicable accounting standards after an objective review by an external accounting firm. RCPS are hybrid financial instruments that can be classified as either debt or equity depending on contractual terms, and this capital conversion was an accounting reclassification intended to accurately reflect the substance and rights associated with the financial instrument."

They added, "This measure was taken after the credit rating downgrade and after the issuance of asset-backed short-term bonds (ABSTB), and it is not a measure that involves cash inflow or liquidity improvement."

The prosecution suspects that MBK committed accounting fraud exceeding 1 trillion won. Right before applying for Homeplus’s corporate rehabilitation, MBK changed the RCPS redemption rights, which amounted to approximately 1.1 trillion won, from the original special purpose company (SPC), Korea Retail Investment, to Homeplus. The prosecution argues that treating this as equity rather than debt does not comply with accounting standards.

MBK also stated, "The revaluation of land assets was conducted through formal procedures based on an objective appraisal by a government-authorized appraisal agency, in accordance with procedures explicitly permitted by accounting standards."

They continued, "Many companies holding real estate have conducted asset revaluations in the same manner. In fact, Lotte Shopping and Hotel Shilla have also revalued their land assets in the past. The financial statements reflecting the results of the asset revaluation were disclosed in June 2025, after the rehabilitation filing."

MBK concluded, "Ultimately, the prosecution is interpreting accounting treatments that were conducted legitimately under accounting standards prior to the commencement of rehabilitation proceedings as problematic, and is thereby claiming that the rehabilitation process itself was carried out with negative intent. Such claims are logically unsound and will be fully clarified in court."