The Fair Trade Commission is investigating the legality of internal transactions between MBK Partners, Homeplus, and Lotte Card under the Fair Trade Act.
According to the industry on the 25th, the Fair Trade Commission has reportedly conducted on-site investigations targeting the headquarters of MBK Partners, Homeplus, and Lotte Card, and has secured relevant documents.
Initially, the Fair Trade Commission is said to be examining the nature and appropriateness of the dividends from the redeemable convertible preferred shares (RCPS) that Homeplus has paid annually to MBK. The RCPS is a structure that pays interest-like revenue as it is a type of stock, and the Fair Trade Commission is expected to investigate whether excessive funds have been reclaimed from the affiliates.
MBK acquired Homeplus in 2015 for about 7.2 trillion won, securing 5 trillion won in acquisition funds under Homeplus's name. Of this, 700 billion won was raised through the issuance of RCPS, and Homeplus has paid more than 100 billion won annually as other expenses to MBK's special purpose corporation (SPC) 'Korea Retail Investment' since then. The Fair Trade Commission is expected to determine whether the payments were dividends based on Homeplus's voluntary judgment or unjust internal transactions based on MBK's control.
In addition, the Fair Trade Commission is looking into whether Lotte Card favored transaction conditions in the corporate credit card agreement process with Homeplus. Given the nature of large supermarkets, where bulk purchases take place, the key issue is whether there were benefits due to being affiliates. The Fair Trade Commission is reportedly investigating whether such a structure can be considered 'unjust support' that effectively benefits specific affiliates.
A Fair Trade Commission official said, 'I cannot confirm anything regarding the matter under investigation.'