The Financial Supervisory Service put off deciding the level of sanctions against MBK Partners over the "Homeplus Co. affair" and deferred the discussion to the next meeting.
The Financial Supervisory Service (FSS) convened a sanctions review committee on the morning of the 18th to discuss sanction measures against MBK Partners, but did not reach a conclusion and decided to reconvene at a later meeting. The next sanctions review is expected to be held next year.
As a sanctions review on banks' misselling of ELS linked to the Hang Seng China Enterprises Index was also set to be held in the afternoon, the MBK case was carried over to the next meeting for further discussion.
Financial Supervisory Service Governor Lee Chan-jin said at an inaugural press briefing on the 1st that the agency would wrap up a sanctions decision on MBK Partners within the year, but the plan fell through as no conclusion was reached at this meeting.
Earlier, the Financial Supervisory Service (FSS) sent MBK Partners a prior notice of action last month that included heavy disciplinary measures such as suspension of duties. This is the first case in which the financial authorities have pursued heavy sanctions against a general partner (GP/manager) of an institution-only private equity fund (PEF).
Under the Financial Investment Services and Capital Markets Act, the levels of sanctions for a GP are classified in the following order: "institutional caution," "institutional warning," "suspension of duties" (within six months), and "dismissal recommendation."
The Financial Supervisory Service (FSS) believes MBK Partners engaged in unsound business practices that harmed the interests of limited partners (LPs), including the National Pension Service, by changing the terms of redeemable convertible preferred shares (RCPS) issued by Homeplus Co.
However, some in the market note that the RCPS with changed terms are not securities held by the National Pension Service, and there is also analysis that the measure actually increased the likelihood of the National Pension Service recovering its investment, leaving opinions divided.