[비즈한국] The Homeplus issue has returned to the spotlight during this year's parliamentary audit. As Homeplus continues to struggle with normalizing operations even after the approval of its rehabilitation plan, concerns over its potential for recovery are growing. Although MBK Partners, the former major shareholder, is in the process of stepping down from its position as a shareholder and administrator, the issue of Chairman Kim Byung-ju's responsibility for the Homeplus crisis remains unresolved.
Sluggish Sales and Voluntary Retirements… Normalization Struggles Despite 200 Billion Won Injection
On the 12th, Homeplus CEO Cho Joo-yeon attended the National Assembly's National Policy Committee audit as a witness and expressed the difficulties in normalizing management. CEO Cho stated, "Although we were able to resume operations through 200 billion won in DIP (Debtor In Possession) financing—operating funds raised to keep a rehabilitating company running—the normalization of supplies we initially expected has not been achieved." She added, "We had a plan to continue increasing inventory and sales through credit transactions, but in reality, only advance payments and cash transactions are possible. The situation is extremely limited for increasing sales."
Due to financial difficulties, Homeplus temporarily suspended operations at 67 stores nationwide in July. After securing 200 billion won in emergency operating funds on August 5, it officially resumed operations on the 13th of the same month. In the five days immediately following the reopening, sales saw a temporary recovery, increasing by 191% compared to before the suspension. Expectations for management normalization grew further after the court approved the rehabilitation plan on September 2.
However, the initial sales recovery post-reopening did not last long. It was reported that Homeplus's sales target achievement rate remained at the 40% level in mid-September, and dropped to the 30% range this month.
As the recovery in sales has been delayed, it appears that the repayment of supply costs is facing setbacks once again. Homeplus had planned to repay the overdue payments to suppliers sequentially, based on the sales recovered through resumed operations. However, due to poor sales, payments are not being made smoothly, leading to further contraction in product supplies.
A Homeplus employee said, "While product deliveries were active when operations first resumed, the volume has decreased significantly recently," adding, "Some stores have hardly received any goods this month."
Homeplus has also recently begun downsizing its workforce. Applications for voluntary retirement are being accepted from October 7 to 22, and it is known that no separate severance package will be provided. During the parliamentary audit, criticism followed regarding whether it is appropriate to pursue voluntary retirement just two months after securing emergency operating funds. In particular, the facts that the voluntary retirement plan was not included at the time of the funding and that personnel reductions are being carried out without extra compensation were brought to the table.
CEO Cho expressed her stance that the current difficulties can only be solved if the merger and acquisition (M&A) proceeds as planned. "I am very sorry," CEO Cho said. "Ultimately, I believe that the current situation can be resolved well only if the M&A proceeds as planned." Homeplus is pushing forward with the sale process, aiming to receive letters of intent for acquisition by the end of this month. However, whether a buyer can actually be secured remains uncertain.
Chairman Kim Byung-ju’s ‘Resummoning’… Attention Focused on Whether He Will Attend
As Homeplus faces difficulties in management normalization, its former major shareholder, MBK Partners, is in the process of clearing its equity stake and administrative position. On September 14, all approximately 2.4 million shares of Homeplus common stock held by MBK were canceled without compensation, causing MBK to lose its status as the largest shareholder. This was a measure taken in accordance with the court-approved rehabilitation plan, canceling the common stock stake worth approximately 2.5 trillion won that MBK had invested when it acquired Homeplus in 2015.
Following the stock cancellation, MBK Partners Vice Chairman Kim Kwang-il also recently expressed his intention to resign from his position as co-administrator of Homeplus. An industry insider explained, "The exact time of his resignation will be decided according to the court's decision." The Seoul Rehabilitation Court is currently considering the appointment of a successor administrator while gathering opinions from stakeholders, including the creditors.
However, aside from MBK stepping down from its role as shareholder and administrator, there are voices calling for it to continue taking responsibility for the normalization of Homeplus. The Homeplus branch of the Mart Industry Union argued, "MBK submitted a rehabilitation plan saying normalization was possible, and the government, the National Assembly, and the labor union trusted those words and supported the approval," adding, "MBK must take responsibility for the operating funds necessary for the implementation of the rehabilitation plan until the M&A is finalized."
MBK maintains that it is fulfilling its responsibility for the rehabilitation of Homeplus through the non-compensated stock cancellation and financial support. They explain that the scale of financial burdens assumed during the rehabilitation process, including private contributions, cash support, and payment guarantees, amounts to a total of 600 billion won.
Amidst this controversy, Chairman Kim was selected as a witness for the National Assembly’s Trade, Industry, Energy, SMEs and Startups Committee audit on October 7 but did not attend. While he did attend the National Policy Committee audit last October, this year he cited reasons for his non-attendance, including that he was not involved in the individual management of Homeplus and that related investigations are underway.
Representative Woo Jae-jun of the People Power Party, who requested Chairman Kim as a witness, criticized him, saying, "After acquiring Homeplus, MBK filed for rehabilitation, and in the process, massive claims such as product payment receivables for small business owners went unpaid." He added, "Since this is a case where the wealthiest individual in South Korea did not pay small business owners, the National Assembly should join together to rebuke him."
On the 13th, the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee re-selected Chairman Kim as a witness for the comprehensive audit on October 23. It is known that they plan to consider issuing a subpoena or filing a complaint if he fails to attend again. MBK Partners did not provide an answer regarding whether Chairman Kim would attend the parliamentary audit.