The prosecution is conducting a search and seizure of Korea Credit Rating and Korea Ratings, which downgraded Homeplus's credit rating last February. This is to verify whether they shared relevant information with Homeplus and its major shareholder MBK Partners before the downgrade.
On the 12th, the Anti-Corruption Division 3 of the Seoul Central District Prosecutors' Office (Director General Lee Seung-hak) is conducting a search and seizure of the offices of Korea Ratings and Korea Ratings in Yeongdeungpo-gu, Seoul. The prosecution is reportedly set to determine whether the two companies notified Homeplus in advance about the possibility of a credit rating downgrade.
The two companies downgraded Homeplus's commercial paper (CP) and short-term bond credit ratings from A3 to A3-, which is just above the speculative grade, on February 28. Homeplus filed for corporate rehabilitation with the court four days later on March 4.
The issue is that Homeplus sold bonds worth 82.9 billion won through Shinyoung Securities three days before the credit rating downgrade on February 25. The 82.9 billion won is about half of the asset-backed security short-term bonds (ABSTB) that Homeplus issued in February.
As a result, investors in Shinyoung Securities and Homeplus's electronic short-term bonds filed complaints against MBK Chairman Kim Byeong-joo and others for fraud with the prosecution. The Supreme Public Prosecutors' Office has assigned the case to the Anti-Corruption Division 3 of the Seoul Central District Prosecutors' Office. The prosecution conducted a search and seizure of Homeplus and MBK Partners on the 28th of last month.
Separately from the complaint case, the Financial Services Commission also referred the fraud allegations against Homeplus and MBK to the prosecution. Financial authorities are suspicious that Homeplus and MBK were aware of the potential for a credit rating downgrade in advance and were preparing for corporate rehabilitation while continuing to sell bonds. Filing for corporate rehabilitation with the court freezes financial liabilities. If they sold bonds knowing this, it could be considered fraudulent behavior.