[비즈한국] The prosecution has requested an arrest warrant for Kim Byung-ju, Chairman of MBK Partners, on charges of fraud in connection with the Homeplus crisis. While Chairman Kim had previously drawn industry attention by successfully executing a series of large-scale M&As, he now stands at a crossroads of arrest as Homeplus falls into a management crisis. Workers and investors, who have long claimed that the responsibility for the Homeplus situation lies with Chairman Kim, are raising their voices to demand stern punishment.
"Issued Bonds Despite Knowing of Credit Downgrade," Prosecution Detects Signs of 'Fraudulent Unfair Trading'
On the 7th, the Seoul Central District Prosecutors' Office's Anti-Corruption Investigation Department 3 requested arrest warrants for MBK Partners Chairman Kim Byung-ju, MBK Partners Vice Chairman and Homeplus CEO Kim Kwang-il, MBK Partners Vice President Kim Jung-hwan, and Homeplus CFO Lee Sung-jin on charges of fraud under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes and violations of the Capital Markets Act. The prosecution concluded that they issued large-scale electronic short-term bonds (e-notes) while aware of the potential for a Homeplus credit rating downgrade last year, and subsequently filed for corporate rehabilitation, causing losses to bond investors.
During the investigation, the prosecution reportedly captured evidence that key MBK Partners management, including Chairman Kim, had been directly briefed on Homeplus's cumulative deficit situation since the end of 2023. Furthermore, they determined it highly likely that the management was aware of the potential credit rating downgrade in February of last year, just before Homeplus entered corporate rehabilitation procedures.
MBK Partners is categorically denying the related charges. Homeplus also stated in a media briefing on the 8th, "We express deep concern and regret regarding the prosecution's request for arrest warrants for our company's administrator, executives, and key management of our shareholder firm."
Chairman Kim was once considered a symbolic figure representing not just Korea, but the Asian private equity market. His aggressive M&A strategy, backed by massive capital, propelled MBK Partners to the ranks of Asia's largest PEF managers, and he was hailed as a 'deal maker' by global investors.
However, the failure of Homeplus management became a decisive turning point that led to a re-evaluation of Chairman Kim. Back in 2015, when he acquired Homeplus from Tesco for 7.2 trillion won, the market highly valued his 'gambler' instincts. But since then, as MBK Partners proceeded to sell off profitable assets and forced through workforce reductions, critics argued that his management style was essentially akin to corporate liquidation. Criticism poured in that he engaged in 'vampire management' focused solely on generating short-term profits without any intent to revive the company, bringing Chairman Kim's accountability to the forefront.
In particular, Chairman Kim's attitude during the Homeplus corporate rehabilitation process fueled public indignation. Many in the industry argued that since Chairman Kim had reaped massive personal assets and dividend income, he should at least contribute personal funds or offer a responsible compensation plan to normalize Homeplus. As public criticism intensified, Chairman Kim belatedly brought out a card to contribute personal funds, but since a significant portion was in the form of payment guarantees rather than cash, he could not escape criticism that it was merely for 'evading responsibility'.
Homeplus Left as an 'Empty Shell' Due to 'Vampire Management'
Homeplus is currently evaluated as effectively being in the process of corporate dissolution. An attempted 'stalking-horse' sale, which involves selecting a preferred bidder and then proceeding with competitive bidding, fell through, and a subsequent attempt at a public auction drew zero participants. As operating funds dried up, the company fell behind on taxes, and in December of last year, it even reached the point where employee wage payments were delayed.
Ultimately, Homeplus abandoned the wholesale sale it had been pursuing for over a year and shifted its strategy to a separate sale. The structural innovation-type rehabilitation plan submitted to the Seoul Rehabilitation Court on December 29th reportedly includes plans to re-push for the separate sale of Homeplus Express (SSM). It also includes a plan to gradually close up to 41 leased stores over the next 6 years.
As the failure of the sale and worsening management of Homeplus have become reality, labor circles and victim groups are strongly demanding Chairman Kim's judicial accountability. The Joint Committee for Resolving the Homeplus Crisis announced that it is launching a pan-national petition movement to urge the court to conduct a strict judgment and detention investigation of the four key executives, including Chairman Kim. The committee pointed out, "The suspects, after acquiring the industry's number two player Homeplus, sold off profitable stores like the Ansan and Gaya branches at bargain prices solely to recover their investment capital," adding, "This is clearly asset plundering and looting, not management."
The Homeplus E-note Victim Committee also emphasized the necessity of a detention investigation. The committee stated, "If they are indicted without detention, the possibility of evidence destruction will increase. A detention investigation is not an option but a necessity," noting, "The e-note crisis is a criminal act that ruined and paralyzed people's lives, not just corporate losses."
The warrant review to determine whether to detain the four MBK Partners and Homeplus executives, including Chairman Kim, will be held on the 13th at the Seoul Central District Court.