As the Financial Supervisory Service gathered Korea's major private equity fund (PEF) managers in one place, Vice Governor Seo Jae-wan appeared to single out MBK Partners, saying, "We began sanctions because it seems the bad examples of overseas PE are appearing domestically," and emphasized, "We must prevent the side effects now so PEs can perform their positive functions."
According to the investment banking (IB) industry on the 20th, the Financial Supervisory Service (FSS) held a meeting that afternoon with members of the Private Equity Council. From the FSS, senior officials including Governor Lee Chan-jin and Vice Governor Seo attended. From the PE side, 12 chief executives and representatives of major managers, including Council Chair Park Byung-gun, attended. MBK Partners did not attend.
This meeting was the first since Governor Lee took office. The previous meeting was held in Dec. 2024 by former Governor Lee Bok-hyun.
The "bad examples of overseas PE" mentioned by Vice Governor Seo at the meeting are interpreted as referring to so-called "asset strippers" overseas. An asset stripper focuses not on acquiring and growing a company for sale, but on carving out assets within the company to cash them out and recoup investment. Dividend expansion and sale-and-leaseback of real estate are also regarded as among the strategies of asset strippers.
Vice Governor Seo was quoted as saying to the effect that "the FSS is working to strengthen the positive functions of PE, not to hassle PEs."
He also reportedly added, "Going forward, I will serve as the communication channel, stay in frequent contact with PEs, and have many conversations."
At the meeting, Vice Governor Seo also discussed the management plan for the Public Growth Fund and asked for PEs' cooperation.
He was also quoted as saying to the effect that "over the five years of the Lee Jae-myung administration, liquidity will continue to be supplied, and PE needs to move in step," and that "if situations like the Homeplus Co. case are not resolved, PEs will head in an increasingly negative direction."
In his opening remarks, Governor Lee was also reported as saying, "We will achieve a sound and transparent investment culture through strict law enforcement and self-regulation," and, "We will strengthen internal controls by enhancing self-regulation and compliance monitoring."
He also asked, "PEs should play an active role as risk capital and fulfill their social responsibilities."
The Financial Supervisory Service (FSS) is investigating whether MBK Partners infringed on the interests of investors such as the National Pension Service in the process of adjusting Homeplus Co.'s redeemable convertible preferred shares (RCPS) from liability to equity. It planned to convene a sanctions review committee to determine the level of sanctions against MBK Partners, but the matter has been postponed twice.