KB News Desk
Prosecutors on Monday summoned MBK Partners Vice Chairman and Homeplus co-CEO Kim Kwang-il, stepping up their investigation into the private equity firm’s alleged role in the retailer’s financial crisis.
The Seoul Central District Prosecutors’ Office questioned Kim as a suspect over alleged fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act. It was his second appearance before prosecutors, following his first questioning Friday.
Prosecutors have been widening their investigation to senior executives at Homeplus and its controlling shareholder, MBK Partners. Several top positions at the retailer are held by MBK executives.
After questioning a Homeplus finance executive late last month, prosecutors summoned Homeplus Chief Financial Officer Lee Sung-jin on July 20 before calling in Kim.
Prosecutors suspect MBK and Homeplus executives continued issuing asset-backed short-term bonds despite anticipating a credit-rating downgrade due to the retailer’s deteriorating finances.
Korea Investors Service downgraded Homeplus’ corporate credit rating from A3 to A3- in February last year. The retailer filed for court-led rehabilitation the following month.
Shinyoung Securities and Hana Securities, which underwrote and sold the bonds, filed complaints against MBK Chairman Michael ByungJu Kim, Vice Chairman Kim Kwang-il and others.
Prosecutors are also considering whether to summon the MBK chairman. After questioning the key suspects, they are expected to decide whether to seek arrest warrants again and pursue indictments.
