Lee Bok-hyun, head of the Financial Supervisory Service (FSS), noted that he will expand the scope of inspections related to the Homeplus incident. Currently, the FSS is inspecting Shinyoung Securities, the underwriter of the Plus Asset-Backed Short-Term Bond (ABSTB), and credit rating agencies Korea Ratings and Korea Corporate Ratings. This is a measure to determine whether they issued bonds to raise funds until the last moment even while knowing about the credit downgrade, and the FSS also indicated that they will inspect the largest shareholder, MBK Partners.
On the 18th, Lee stated at the National Assembly's Political Affairs Committee meeting, "I am currently inspecting securities firms and credit rating agencies, and I am thinking that the inspections need to be expanded," and added, "Internal considerations are necessary, so I will finish the discussions in a very short period and report on the expanded inspection scope."
This remark came during a criticism of leveraged buyouts (LBO). A leveraged buyout refers to the method of borrowing money to acquire a target company's assets as collateral. According to Democratic Party lawmaker Kim Nam-geun, MBK Partners raised 2.2 trillion won in funds when acquiring Homeplus in 2015. The remaining approximately 5 trillion won was borrowed in the name of Homeplus. Lee stated, "I am seriously concerned about the LBO."
On that day, Lee also strongly criticized MBK Partners Chairman Kim Byung-joo for not attending the political affairs committee meeting. Lee noted, "Even if the recovery plan is approved, creditors could lose about half or a third of their investment," and added, "I also seriously view Chairman Kim's absence today." Both ruling and opposition parties criticized Kim's non-attendance, and Lee supported this criticism. Instead of Chairman Kim, Kim Kwang-il, vice chairman of MBK Partners, attended.
Lee mentioned, "I have raised the issue several times regarding the problem that financial capital can dominate industrial capital, leading to adverse effects," and added, "The lifespan for investment requires a certain period, but institution-only private equity funds, on average, recover within seven years, which raises social concerns."