The Democratic Party of Korea met with the Homeplus labor union and the store owners to diagnose the 'Homeplus situation' that arose as Homeplus entered corporate rehabilitation procedures (court receivership). The Democratic Party pointed out that the process of Homeplus applying for rehabilitation and the lax management by its largest shareholder, private equity firm MBK Partners, resulted in this situation.
The Democratic Party's Euljiro Committee held an emergency meeting with the Homeplus union and store owners on the afternoon of the 9th at the National Assembly's member's office building. The Democratic Party is currently discussing countermeasures by forming a 'Homeplus Task Force (TF)' centered on the Euljiro Committee. The TF includes Members of Parliament Min Byung-deok, Kim Hyun-jeong, Lee Kang-il, Kim Nam-geun, Song Jae-bong, Park Ji-hye, Lee Yong-woo, Jeon Jin-suk, and Park Min-kyu.
During the meeting, issues arising from Homeplus pushing for corporate rehabilitation procedures were discussed, including ▲large-scale store closures ▲worker job insecurity ▲threats to the survival rights of franchise owners. In particular, it was highlighted that the payment amounts not settled by Homeplus since January have reached hundreds of millions of won, indicating severe damage.
The Democratic Party raised questions about the procedure for Homeplus applying for corporate rehabilitation. Member of Parliament Min Byung-deok said, 'Homeplus submitted its application for rehabilitation at 12:03 a.m. on the 4th, and a trial was held at 10 a.m. that morning, with a decision made by 11 a.m. This is simply not possible without prior notification.'
He added, 'Homeplus has 100,000 employees among its affiliated vendors, and it is imperative to question the rehabilitation court's decision,' and noted, 'Recent reports on the Fair Trade Commission regarding the Homeplus situation suggest a complete lack of awareness of the concerns among vendors and workers. We must ensure they do not become victims of corporate rehabilitation.'
There were also remarks questioning the management style of MBK, the largest shareholder. Jin Sung-jun, the policy chairperson of the Democratic Party, said during the meeting, 'We are looking into whether the situation arose from lax and indiscriminate management after a private equity firm acquired Homeplus, not just the court issues. It's urgent and pressing to ensure that vendors and workers do not suffer.'
Member of Parliament Kim Nam-geun also stated, 'MBK used the leveraged buyout (LBO) method by securing loans against the assets of Homeplus, the acquired company, rather than its own capital,' and added, 'Concerns have been raised since the acquisition that Homeplus's assets would continue to decline, hindering normal operations.' He further noted, 'In cases where only an LBO is conducted without additional investment, there are precedents that fall under the crime of breach of trust.'
The Homeplus union also pointed out that the management situation worsened following MBK's acquisition. An Soo-yong, commissioner of the Homeplus branch of the Mart Union, said, 'MBK became the largest private equity firm by purchasing Homeplus for 7.2 trillion won in 2015, and it has become a lever to raise billions of won in funds,' expressing suspicion that 'now they are just extracting as much as they can and leaving the debt to the courts to resolve the situation.'
On the 28th of last month, Homeplus applied for corporate rehabilitation after Korea Credit Ratings and Korea Ratings downgraded Homeplus's commercial paper and short-term corporate bond credit ratings from 'A3' to 'A3-.' In this context, MBK stated it was a preemptive measure to reduce potential short-term financial burdens.