Seoul: The chief of the country's financial watchdog on Thursday addressed the ongoing controversy surrounding private equity fund MBK Partners Ltd. and its subsidiary, Homeplus Co., regarding their preparedness for a court rehabilitation scheme prior to a rating downgrade and subsequent debt sale.
According to Yonhap News Agency, Lee Bok-hyun, governor of the Financial Supervisory Service (FSS), contradicted claims by MBK Partners and Homeplus that they began planning for court-led rehabilitation only after Homeplus' ratings were lowered on February 28. On March 4, Homeplus entered into court-led rehabilitation proceedings. Both entities have maintained that they sold short-term debts without anticipating a downgrade in ratings.
Lee stated during a press briefing that evidence had been secured showing MBK Partners and Homeplus were aware of the impending rating cut and had long been preparing for rehabilitation proceedings. Consequently, earlier this week, the watchdog referred the case to the prosecution for further investigation.
The FSS chief emphasized the agency's commitment to cooperating with the prosecution and investigating any legal violations or speculative activities linked to the incident. He also criticized MBK Partners for failing to take responsibility for the situation, such as through stock cancellation or additional capital injection.
In response to criticism, MBK Partners announced that its chair, Kim Byung-ju, intends to use personal assets to support suppliers impacted by Homeplus' court-led rehabilitation. Despite this, MBK Partners has faced backlash for placing Homeplus under rehabilitation without attempting self-recovery measures.
MBK Partners and Homeplus reiterated their stance, denying any anticipation of the credit rating downgrade or prior preparations for rehabilitation. They further claimed no involvement in the asset-backed short-term bond (ABSTB) transactions, asserting that MBK Partners only received information from Homeplus regarding the planned issuance size and played no role in decision-making or directives related to the transaction.