Lee Bok-hyun, head of the Financial Supervisory Service (FSS), noted that the agency plans to expand the scope of its inspections related to the Homeplus situation. Currently, the FSS is inspecting Shinyoung Securities, the lead manager of the Homeplus card payment-based asset-backed short-term bonds (ABSTB), and credit rating agencies Korea Ratings and Korea Corporate Ratings. This is an effort to investigate whether bonds were issued to raise funds until the end, despite knowing about the credit rating downgrade, and the FSS indicated it would also inspect MBK Partners, the majority shareholder.

Lee Bok-hyun, the Governor of the Financial Supervisory Service, is responding to questions from lawmakers during an emergency inquiry regarding Homeplus, MBK Partners, and SAMBU Construction at the National Assembly's Political Affairs Committee in Yeouido, Seoul this morning.
Lee Bok-hyun, the Governor of the Financial Supervisory Service, is responding to questions from lawmakers during an emergency inquiry regarding Homeplus, MBK Partners, and SAMBU Construction at the National Assembly's Political Affairs Committee in Yeouido, Seoul this morning.

During a full meeting of the National Assembly's Political Affairs Committee on the 18th, Lee said, “We are currently inspecting securities firms and credit rating agencies, and I think we need to expand the inspections,” and added, “Internal reviews are necessary, so I will finish discussions in a very short time and report on the expanded inspection targets.”

This statement came during the criticism of leveraged buyouts (LBO). A leveraged buyout refers to the method of acquiring a company by borrowing against the assets of the target entity as collateral. According to Democratic Party lawmaker Kim Nam-kun, 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 noted, “I view LBOs seriously.”

On that day, Lee strongly criticized Kim Byung-joo, chairman of MBK Partners, for not attending the Political Affairs Committee meeting. Lee said, “Even if a rehabilitation plan is approved, creditors may lose about half or one-third of their money” and added, “I also view Chairman Kim's absence today seriously.” Both ruling and opposition parties criticized Kim's absence, and Lee echoed their sentiments. Instead of Chairman Kim, Vice Chairman Kim Kwang-il represented MBK Partners at the meeting.

Lee remarked, “I have raised concerns several times about the issues that can arise when financial capital dominates industrial capital” and added, “A lifespan is needed for a certain period, but institutional private equity funds are typically recouped in around seven years, which necessitates societal consideration.”