Seoul: A court said Thursday it will hold a hearing next week to decide whether to issue arrest warrants for the chairman of private equity firm MBK Partners, Kim Byung-ju, and three other senior executives over the management of troubled retailer Homeplus Co. The Seoul Central District Court announced that the hearing is scheduled for next Tuesday, following the prosecutors' request for arrest warrants against Kim and three other senior executives, including a co-chief executive of Homeplus, on charges of fraud and violation of the Capital Markets Act. The court's decision on their potential arrest could be released as early as later that day.

According to Yonhap News Agency, MBK Partners acquired a 100 percent stake in Homeplus in 2015 from British retailer Tesco Plc for 7.2 trillion won (US$4.9 billion). However, Homeplus faced financial difficulties due to a downturn in the discount store industry, leading to court-led rehabilitation proceedings in March last year. MBK Partners is accused of allegedly selling a large-scale short-term bond of Homeplus around the time of the credit downgrade for the retailer.

On February 28 last year, Korea Ratings downgraded Homeplus's credit rating to "A3 minus" from "A3." Four days later, Homeplus sought court approval for rehabilitation proceedings.