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FSS begins disciplinary measures against MBK Partners over Homeplus scandal

Published: 31 Aug. 2025, 18:07 Updated: 31 Aug. 2025, 18:18

YOON SO-YEON
[email protected]

A member of a Homeplus labor union sheds tears at a rally held on April 14 in front of MBK Partners' headquarters in Jongno District, central Seoul. [NEWS1]

The financial watchdog began official disciplinary measures against MBK Partners with a formal inspection opinion regarding the Homeplus scandal, in addition to a field inspection of the company that took place earlier this week.

The Financial Supervisory Service (FSS) sent its official written opinion on the investigation to MBK Partners earlier this week, according to financial sources on Sunday.

A written opinion acts as a notice of penalty when the FSS confirms illegalities from the findings of its on-site investigation. The results were based on an on-site investigation of MBK Partners' headquarters conducted in March 2023. The FSS, along with the Financial Services Commission (FSC), conducted another inquiry on Thursday.

Prosecutors have also begun investigations into allegations that Homeplus issued 600 billion won ($432 million) worth of short-term bonds while concealing its intention to initiate corporate rehabilitation.

“This is a grave matter of national concern,” an FSS official said. “We intend to move forward with disciplinary actions as swiftly as possible.”

The new disciplinary process is likely to focus on whether MBK Partners engaged in unsound business practices, which are prohibited under Korea’s Financial Investment Services and Capital Markets Act for general partners (GPs) operating private equity funds.

MBK Partners logo [SCREEN CAPTURE]

The written opinion also includes concerns over MBK’s handling of redeemable convertible preferred shares (RCPS) — preferred shares that allow investors to demand repayment or convert the shares to common stock after a specific period — issued during its acquisition of Homeplus, according to reports. Regulators are investigating whether changes to RCPS redemption terms around the time of Homeplus’ credit downgrade disadvantaged investors, including the National Pension Service, which had invested 582.6 billion won.

The FSS will schedule its disciplinary committee after receiving a response from MBK Partners and then deliver its decision on the penalties. The FSC will authorize the final decision.

“The change in RCPS terms was intended to protect investors’ interests by preserving the value of Homeplus shares held by Korea Retail Investment, following concerns over the company’s credit rating," MBK Partners said Sunday in response to the FSS measures.

“We will fully cooperate with the regulatory review and provide all necessary explanations."

BY YOON SO-YEON [[email protected]]