The prosecution is conducting a search and seizure of Homeplus and its major shareholder, private equity fund MBK Partners. Homeplus sold bonds to investors until Feb. 25, and three days later, its credit rating was downgraded. Then, on March 4, it filed for corporate rehabilitation. The prosecution suspects that Homeplus and MBK Partners may have misled investors by selling large amounts of bonds to individuals and corporations despite being aware of the downgrade.
On the 28th, the 3rd Division of the Anti-Corruption Investigation of the Seoul Central District Prosecutors' Office (Director General Lee Seung-hak) is searching the headquarters of Homeplus in Gangseo District, Seoul, and MBK Partners. This is part of the investigation into the case where Homeplus bond underwriter Shinyoung Securities and Homeplus bond investors reported MBK Chairman Kim Byung-joo and others for fraud and violations of the Capital Markets Act. It is reported that the search targets included MBK Chairman Kim Byung-joo, MBK Vice Chairman Kim Gwang-il, and Homeplus CEO Jo Ju-yeon, among other management personnel.
Homeplus disclosed on Feb. 28 that its credit rating was downgraded from the previous A3 to A3-, just above the speculative grade (B). Homeplus applied for the commencement of corporate rehabilitation at the court in the early hours of March 4, four days later. The court issued a comprehensive prohibition order, and the rehabilitation process is currently ongoing.
The issue is that Homeplus sold bonds worth 82.9 billion won through Shinyoung Securities on Feb. 25, just three days before the credit rating downgrade. The 82.9 billion won is about half of the asset-backed short-term bonds (ABSTB) issued by Homeplus in February.
As a result, Shinyoung Securities and Homeplus investors in the electronic short-term bonds separately filed complaints against MBK Chairman Kim Byung-joo for fraud. The Supreme Public Prosecutors' Office assigned this case to the 3rd Division of the Anti-Corruption Investigation at the Seoul Central District Prosecutors' Office.
Apart from the complaint case, the Financial Services Commission also referred the fraud allegations against Homeplus and MBK to the prosecution. The financial authorities are suspicious that Homeplus and MBK were aware of the possibility of a credit rating downgrade in advance and were preparing for corporate rehabilitation while continuing to sell bonds. When applying for corporate rehabilitation to the court, financial obligations are frozen. If they sold bonds despite knowing these facts, it could be considered misleading.