Seoul: The chairman of private equity firm MBK Partners, Kim Byung-ju, along with three other senior executives, appeared at a Seoul court to attend a hearing concerning their potential arrest related to the sale of short-term bonds of the troubled retailer Homeplus Co.

According to Yonhap News Agency, Kim and the executives, including a co-chief executive of Homeplus, are facing charges of fraud and violation of the Capital Markets Act. Prosecutors have sought arrest warrants against them. Kim arrived at the Seoul Central District Court but did not address reporters' questions, including inquiries about whether he acknowledged the allegations.

A decision on their potential arrest is anticipated as early as later today. The issues stem from MBK Partners' acquisition of a 100 percent stake in Homeplus in 2015, purchased from British retailer Tesco Plc for 7.2 trillion won (US$4.9 billion). Despite the acquisition, Homeplus encountered financial difficulties due to a downturn in the discount store industry, leading to court-led rehabilitation proceedings in March of the previous year.

MBK Partners has faced accusations of allegedly selling a substantial short-term bond of Homeplus around the time the retailer's credit rating was downgraded. On February 28 of last year, Korea Ratings lowered Homeplus's credit rating to "A3 minus" from "A3." Just four days later, Homeplus sought court intervention for rehabilitation proceedings.