Prosecution Reassigns "MBK Homeplus Case" to Second Anti-Corruption Division... "Reflective Review"

All Four Arrest Warrants for Chairman Kim Byungjoo and Three Others Previously Dismissed
The Prosecution: "The Case Will Be Reassessed from an Objective Perspective"

The prosecution has reassigned the case of Chairman Kim Byungjoo of MBK Partners and other executives, who are suspected of concealing Homeplus's financial crisis and shifting the losses onto ordinary investors.

On the 9th, amid reports that the Special Investigation Headquarters for the Prosecutors' Emergency Martial Law had summoned former Special Warfare Command commander Kwak Junggeun for questioning, the Taegeukgi and prosecutors' flags were fluttering in the wind in front of the Seoul Central District Prosecutors' Office building. Photo by Heo Yeonghan

On the 4th, the Seoul Central District Prosecutors' Office announced that it had reassigned to the Second Anti-Corruption Investigation Division (headed by Senior Prosecutor Lee Sanghyuk) the case in which the Third Anti-Corruption Investigation Division had been investigating Chairman Kim, Vice Chairman Kim Kwangil (Homeplus Co-CEO), Executive Vice President Kim Junghwan, and Senior Managing Director Lee Sungjin on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act.

The prosecution had sought arrest warrants, viewing that the four executives issued large volumes of electronic short-term bonds, including Asset-Backed Short-Term Bonds (ABSTB), even though they anticipated a downgrade in Homeplus's credit rating. However, the court dismissed all the requests, stating that "there is insufficient prima facie evidence of the charges to justify detention."

In response, the prosecution stated that it decided to reassign the case so that a new division, rather than the one that initially launched and conducted the investigation, could review the case once again from an objective perspective.

The prosecution explained, "In light of recent acquittals being handed down one after another in cases directly investigated by prosecutors, this measure is intended to give real effect to Article 4, Paragraph 2 of the Public Prosecutors' Office Act, which embodies the principle of separating investigation and indictment. Unlike the concept of a red team, the newly assigned division will directly decide whether to indict, and will also promptly conduct only the minimum necessary supplementary investigation."

Article 4, Paragraph 2 of the Public Prosecutors' Office Act stipulates that a prosecutor may not file an indictment for a crime for which he or she initiated the investigation.