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Byeongju Kim, Chairman of MBK Partners. (Photo=MBK Partners) |
[Alpha Biz= Kim Jisun] South Korean prosecutors have executed a search and seizure warrant against Kim Byung-joo, Chairman of private equity firm MBK Partners, in connection with allegations that MBK and Homeplus sold short-term bonds while secretly planning to file for court receivership.
According to legal sources on May 18, the Seoul Central District Prosecutors’ Office’s Anti-Corruption Division 3 conducted the seizure operation on the evening of May 17 at Incheon International Airport as Kim returned from London. His mobile phone was reportedly secured during the search. Kim had remained overseas throughout the early stages of the investigation.
The case centers around suspicions that MBK and Homeplus management knowingly concealed an impending credit rating downgrade and planned corporate rehabilitation, while continuing to issue and sell asset-backed short-term bonds (ABSTBs), thereby inflicting losses on investors. These actions are under investigation for potential violations of the Act on the Aggravated Punishment of Specific Economic Crimes (Fraud) and the Capital Markets Act.
The Financial Supervisory Service (FSS) previously investigated the matter and, citing evidence of criminal conduct, referred the case to the prosecution via a fast-track process on April 21. The FSS claims Homeplus was aware in advance of its credit rating being downgraded from ‘A3’ to ‘A3-’ on February 28—just one step above speculative grade—yet proceeded to issue over KRW 150 billion in ABSTBs in February alone. Homeplus then filed for court receivership on March 4.
Following the handover of the case, prosecutors raided MBK’s Seoul headquarters, the Homeplus corporate office, and the residences of key individuals, including Chairman Kim, on April 28. On May 12, the offices of Korea Ratings and NICE Investors Service were also searched as part of efforts to understand the internal decision-making processes behind the Homeplus downgrade.
Authorities have also been questioning Homeplus executives involved in the preparation of the rehabilitation plan, including Chief Compliance Officer Jung Won-hwi.
With the seizure of Chairman Kim’s device, prosecutors are expected to accelerate the investigation. Once digital forensics are complete, they plan to summon Kim and Homeplus CEO Cho Ju-yeon for questioning as suspects.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
