Arrest Warrants Dismissed for MBK's Kim Byungjoo and 3 Others in "Homeplus Incident" ... "Insufficient Evidence of Charges"

Court: "Consequences for Victims Are Serious, but Evidence Is Insufficient"

The court dismissed the arrest warrant for Kim Byungjoo, chairman of MBK Partners, who is accused of fraud amounting to about 100 billion won in connection with the "Homeplus Incident," on January 14.

Chairman Byungjoo Kim of MBK Partners, who is accused of fraud amounting to 100 billion won related to the 'Homeplus Incident,' is entering the Seoul Central District Court in Seocho-gu, Seoul, on the 13th for a pre-arrest suspect interrogation (warrant hearing). Photo by Yonhap News

Park Jungho, the presiding judge in charge of warrants at the Seoul Central District Court, conducted a pre-arrest warrant hearing from 10 a.m. on the 13th for Kim, who faces charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act, as well as Kim Kwangil, Vice Chairman of MBK and CEO of Homeplus, Kim Junghwan, Vice President of MBK, and Lee Sungjin, Chief Financial Officer (CFO) of Homeplus. After the hearing, which lasted into the early hours, the judge dismissed all of their arrest warrants.

Judge Park stated, "It is clear that the consequences for the victims in this case are very serious, but based on the evidence submitted so far, there is insufficient proof to justify detention." He added, "A more thorough analysis and impeachment process may be necessary regarding subjective elements such as intent, as well as logical and evaluative aspects. Considering the level of substantiation and the progress of the investigation, it is more appropriate to allow the defendants ample opportunity to defend themselves without detention, rather than detaining them out of concern for destruction of evidence or flight risk."

Previously, the third anti-corruption investigation division of the Seoul Central District Prosecutors' Office (acting chief prosecutor Kim Bongjin) requested arrest warrants for the four on January 7, on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act. Kim and the others are accused of issuing a large volume of Asset-Backed Short-Term Bonds (ABSTB) despite anticipating a downgrade in Homeplus's credit rating, then abruptly filing for corporate rehabilitation, causing losses to securities firms such as Shin Young Securities that had purchased the bonds.

The warrant hearing, which began at 10 a.m. on the 13th, reportedly lasted about 13 hours and 40 minutes, concluding at 11:40 p.m. This marks the longest warrant hearing since the system was introduced.