Homeplus Co. on the 12th pushed back against allegations that it inflated its asset value by converting liability into equity on its books, saying, "The accounting conversion of redeemable convertible preference shares (RCPS) into equity was carried out lawfully after an objective review by an external accounting firm."
Homeplus Co. said at a media briefing that day, "The equity conversion of preferred shares and the revaluation of land assets are legitimate accounting treatments," and stated accordingly.
Prosecutors currently investigating the Homeplus Co. situation are said to view that MBK Partners, Homeplus Co.'s largest shareholder, violated accounting standards when it transferred the RCPS redemption-right holder from the special purpose company (SPC) Korea Retail Investment to Homeplus Co. They are also said to believe that, when conducting the revaluation of land assets, the value was assessed above the actual market price.
Homeplus Co. maintains that every step in the process was carried out lawfully. Homeplus Co. explained, "The RCPS equity conversion took place on Feb. 27 last year after a credit rating downgrade and is unrelated to the issuance of asset-backed short-term bonds (ABSTB)."
On the land revaluation allegations, the company said, "Real estate values have risen sharply, but we had not revalued assets for a long period, which widened the gap between actual value and book value," adding, "To provide accurate information to investors and other stakeholders, we reflected the current actual asset value on the books through an objective and official process."
It added, "We disclosed the financial statements reflecting the asset revaluation results in June 2025, after the rehabilitation filing."