With the financial authorities urgently notifying prosecutors regarding Homeplus's management and MBK officials, it is expected that the main issue of the investigation will be whether they recognized the possibility of a credit downgrade prior to the transfer notification.
It has also been reported that MBK Partners, the largest shareholder of Homeplus, proposed credit enhancement measures during the reconsideration held following the credit rating downgrade notice from the ratings agency in February. MBK stated that they submitted additional materials during the reconsideration because they were not aware of the credit rating downgrade in advance.
The Securities and Futures Commission under the Financial Services Commission is reported to have notified prosecutors about Homeplus management and MBK Partners officials on the 21st through an urgent measure (fast track). The fast track is a system whereby the Chairman of the Securities and Futures Commission notifies the prosecutors to investigate a case directly without going through the prescribed procedures.
MBK and Homeplus have clarified that they prepared for corporate rehabilitation procedures after receiving notification from the ratings agency on the 28th that Homeplus's short-term credit rating had been downgraded. However, the financial authorities believe that MBK's claim that it did not recognize the credit rating downgrade in advance is not true. They are claiming that they began preparing for rehabilitation procedures starting 28th, after the credit rating downgrade of Homeplus, but this claim is regarded as false.
Lee Bok-hyun, the head of the Financial Supervisory Service, also said on the 10th, "Significant factual relationships were confirmed during the MBK inspection," and noted, "We have initiated the necessary procedures with prosecutors and the Securities and Futures Commission."
The main issue in this case is when MBK recognized the credit rating downgrade of Homeplus. Since Homeplus issued electronic short-term bonds (ABSTB) on the 25th of February, if it was aware of the credit rating decline in advance, it could be punished for fraud.
According to the investment industry, Homeplus received the regular assessment result from Korea Ratings on the afternoon of February 25th, indicating that its short-term credit rating would fall from "A3" to "A3-." Homeplus is said to have requested a reconsideration and proposed credit enhancement measures the next day on the 26th.
MBK holds the position that such proposals were made during the reconsideration because it did not anticipate the credit downgrade in advance. They argue that if they had expected the credit downgrade beforehand, actions would have been taken prior to the transfer.