The prosecution has placed a travel ban on Kim Byung-joo, chairman of MBK Partners, in connection with the Homeplus incident. The prosecution is investigating whether Homeplus and its major shareholder, MBK, concealed the fact that "Homeplus's credit rating is set to be downgraded to just one step above speculative grade" and sold bonds to individuals and corporations.
According to the legal community on the 19th, the 3rd Anti-Corruption Investigation Division of the Seoul Central District Prosecutors' Office, led by Director General Lee Seung-hak, is reported to have placed a travel ban on Kim through the Ministry of Justice.
Under the Immigration Control Act, investigative agencies may impose a travel ban through the Minister of Justice on foreigners deemed unsuitable for departure due to criminal investigations. Kim is a U.S. citizen.
Earlier, the prosecution conducted searches of the MBK Partners headquarters and Kim's residence on the 28th of last month, but Kim was reported to be on a business trip abroad at that time. Accordingly, the prosecution executed a search warrant on Kim upon his return from a business trip to the United Kingdom at Incheon Airport on the 17th. The prosecution is said to have also secured Kim's mobile phone.
The prosecution is reported to have requested a travel ban, believing that Kim could leave the country at any time and be uncooperative with the investigation. Kim had previously failed to respond to a request to appear as a witness at a National Assembly audit.
Kim has been reported for fraud under the Specific Crimes Weighted Punishment Act and violations of the Capital Markets Act in connection with the Homeplus incident.
Homeplus announced on February 28 that its credit rating had been downgraded from A3 to A3-, which is just one step above speculative grade (B). Homeplus applied for 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 underway.
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. This amount represents about half of the asset-backed short-term bonds (ABSTB) issued by Homeplus in February.
As a result, both Shinyoung Securities and investors of Homeplus's short-term electronic bonds have filed complaints against Kim Byung-joo, chairman of MBK, for fraud. Separately, the Financial Services Commission has referred the fraud allegations against Homeplus and MBK to the prosecution.
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. If a corporate rehabilitation application is made to the court, financial liabilities are frozen. If they sold bonds knowing this fact, it could be considered fraudulent behavior.