This article was displayed on the ChosunBiz MoneyMove (MM) site at 2:14 p.m. on Nov. 21, 2025.
The Financial Supervisory Service is expected to notify private equity fund (PEF) manager MBK Partners of a sanction at the level of an institutional warning in connection with the Homeplus Co. case. The Financial Supervisory Service plans to refer MBK Partners to the Sanctions Review Committee in mid-December.
According to the investment banking (IB) industry on the 21st, the Financial Supervisory Service plans to send an advance notice containing a sanction proposal to MBK Partners on this day. An institutional warning is the likely level of sanction. It was also reported that sanctions will be imposed on MBK Partners Vice Chairmen Yoon Jong-ha and Kim Kwang-il personally.
The Financial Supervisory Service will hold a sanctions review in December and is expected to reach a final conclusion. If a sanction of institutional warning or higher is finalized, it would likely be the first heavy penalty against a general partner (GP) that manages institution-only private funds such as MBK Partners.
Under current law, the levels of sanctions against financial companies are classified as institutional caution, institutional warning, corrective order, business suspension, and registration or license revocation. For executives of financial companies, the levels are, in descending order of severity, recommendation for dismissal, suspension from duty, reprimand warning, cautionary warning, and caution.
Following an inspection in March and an additional probe in August, the Financial Supervisory Service identified suspected unsound business practices and violations of internal control obligations by MBK Partners. Financial Supervisory Service Governor Lee Chan-jin has also said stern action against MBK Partners is necessary, making it very unlikely that the sanction plan drafted by the inspection department will be changed during the review and coordination process by the Sanctions Review Bureau.
With this sanction, MBK Partners is expected to take a hit to its business. In materials submitted in March to the office of Lee In-young of the Democratic Party of Korea, a member of the National Policy Committee of the National Assembly, the National Pension Service said, "If sanctions are imposed, the process of selecting an external manager may be suspended or canceled." In July last year, the National Pension Service finalized the selection of four domestic private investment external managers, including MBK Partners.
The Financial Supervisory Service is known to have reviewed MBK Partners from the outset of financing for the Homeplus Co. acquisition. As questions were raised that MBK Partners acquired Homeplus Co. with excessive borrowing, the entire process became subject to inspection, including how it gathered major limited partners (LPs) and how it financed the deal via a leveraged buyout (LBO—acquiring corporations with loans and repaying them with that corporation's asset and revenue).
In April, the financial authorities said they had secured concrete evidence that MBK Partners and Homeplus Co., despite recognizing a credit rating downgrade in advance, misled investors to issue short-term bonds and planned to file for corporate rehabilitation, and they notified prosecutors of alleged unfair trading via a fast-track process.
MBK Partners acquired management control of Homeplus Co. in 2015 for 7.2 trillion won (including existing borrowing fund). In the process, it used an LBO to borrow about 2.7 trillion won. However, after COVID-19, the rapid growth of e-commerce and regulations on big-box stores coincided, leading to deteriorating results and a liquidity crisis. In March, it filed for corporate rehabilitation, facing criticism that it "privatized profits and socialized losses." Homeplus Co. is currently proceeding with a pre-approval sale before the rehabilitation plan is authorized.