The prosecution has reportedly placed travel bans not only on Kim Byeong-joo, Chairman of MBK Partners, but also on Kim Gwang-il, Vice Chairman of MBK, and Jo Joo-yeon, CEO of Homeplus. The prosecution is investigating whether Homeplus and its majority shareholder, MBK, concealed the fact that "the credit rating of Homeplus was downgraded to just one step above speculative grade," while selling bonds to individuals and corporations.
According to the legal community on the 19th, the Anti-Corruption Investigation Division 3 of the Seoul Central District Prosecutors' Office, led by Director General Lee Seung-hak, has reportedly issued a travel ban on Chairman Kim through the Ministry of Justice, while also banning Vice Chairman Kim Gwang-il and CEO Jo Joo-yeon from traveling.
According to the Immigration Control Act, investigative agencies may impose travel bans on foreigners through the Minister of Justice or ban domestic citizens from leaving the country if necessary for criminal investigations. The travel ban and the prohibition on departure are similar in that they both prevent the subject from leaving for a certain period. Chairman Kim Byeong-joo is a U.S. citizen, and thus a travel ban has been imposed.
Previously, on the 28th of last month, the prosecution conducted searches of the MBK Partners headquarters and Chairman Kim's residence, but it was reported that he was overseas at the time. Consequently, the prosecution executed a search warrant for Chairman Kim upon his return from a business trip to the United Kingdom on the 17th at Incheon Airport.
It has been reported that the prosecution has also secured Chairman Kim's mobile phone. The prosecution has requested a travel ban, believing that Chairman Kim could potentially leave the country at any time and hinder the investigation. Chairman Kim has previously ignored demands to appear as a witness for the National Assembly's audit.
Chairman Kim has been reported for fraud under the Act on the Aggravated Punishment of Specific Crimes and for violations of the Capital Markets Act in connection with the Homeplus incident. Homeplus disclosed on February 28 that its credit rating was downgraded from the previous A3 to A3-, just one step above speculative grade. Homeplus applied for corporate rehabilitation at the court early in the morning of March 4, just four days later. The court issued a comprehensive prohibition order, and the rehabilitation process is ongoing.
The problem 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 approximately half of the financial bonds (asset-backed short-term debentures) issued by Homeplus in February.
As a result, both Shinyoung Securities and investors in Homeplus's asset-backed short-term debentures filed charges against Chairman Kim Byeong-joo for fraud with the prosecution. Separately, the Financial Services Commission has also referred the fraud allegations against Homeplus and MBK to the prosecution.
Financial authorities suspect that Homeplus and MBK knew in advance about the possibility of a credit rating downgrade and were preparing for corporate rehabilitation while continuing to sell bonds. If a corporate rehabilitation application is filed with the court, financial obligations are frozen. If they sold bonds knowing this fact, it could constitute fraudulent behavior.