The Financial Supervisory Service will resume its sanctions review of MBK Partners in early next month. With Homeplus Co.'s rehabilitation proceedings underway, it said it is no longer possible for the financial authorities to delay their judgment on MBK.
Lee Chan-jin, governor of the Financial Supervisory Service, said at a regular press briefing at the agency's headquarters on the 22nd, "The MBK sanctions review is scheduled for early July," and "A decision could be made then, or it could be continued for a short period."
He added, "The delay was partly due to reviewing legal issues, and there is room for various interpretations," and explained, "Given the issues related to rehabilitation, we do not believe it is a situation where we can further postpone a decision."
Earlier, the Financial Supervisory Service (FSS) issued a prior notice of heavy sanctions, including suspension of duties, to MBK in November last year. The FSS believes MBK infringed on the interests of investors, including the National Pension Service, in the process of changing the redemption conditions of redeemable convertible preferred shares (RCPS) in a way favorable to Homeplus Co. The FSS views this as a violation of the duty to comply with business conduct by the general partner (GP).
Suspension of duties is a heavy sanction equivalent to a business suspension for a general asset management company, and this is the first push for heavy sanctions on a private equity fund (PEF) manager (GP). The prior notice reportedly also included sanctions of reprimand warning or higher for key executives.
Subsequently, the agenda was discussed at two sanctions reviews on Dec. 18 last year and Jan. 15 this year, but no conclusion was reached.
Meanwhile, MBK is currently unable to narrow differences with Meritz Financial Group over a 200 billion won debtor-in-possession (DIP) loan for Homeplus Co.'s rehabilitation. MBK requested DIP support from Meritz, the largest creditor, but Meritz has set its last line at 100 billion won in support under a joint guarantee condition.