Seoul: The country's financial watchdog on Thursday reportedly decided to discipline MBK Partners Ltd. over its management of Homeplus Co., the struggling retailer the private equity firm wholly owns. The Financial Supervisory Service (FSS) reached an agreement on a penalty that includes suspension from duties, according to sources, marking the first time the watchdog has taken such severe action against a general partner of an institutional private equity fund.

According to Yonhap News Agency, the exascope of the penalty remained unknown. 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). The retailer, however, has since struggled under a broader slump in the discount retail industry and entered court-led rehabilitation proceedings in March.

The FSS' investigation reportedly uncovered signs of improper business practices and violations of internal control obligations. The penalty must still be approved by the Financial Services Commission before it is finalized.

Thursday's decision came a day before the Seoul Bankruptcy Court's deadline for approving the retailer's rehabilitation plan.