An arrest warrant for Kim Byung-ju, chairman of MBK Partners, identified as the focal point of the so-called "Homeplus Co. incident," was rejected on the 14th.
Park Jeong-ho, Director General judge in charge of warrants at the Seoul Central District Court, on the morning of the day rejected the arrest warrant for Chairman Kim, who is suspected of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violating the Financial Investment Services and Capital Markets Act (fraudulent unfair trading).
Director General Judge Park said, "It is clear that the damage from the case is very serious, but based on the materials submitted so far, the suspicion is not sufficiently substantiated to the extent necessary for arrest," explaining the reason for rejection.
Director General Judge Park said, "Considering the issues in this case and the prosecution's supporting materials and logic, as well as the suspect's defense materials and logic," and added, "Unlike a trial, in a warrant hearing the suspect has no right to access the prosecution's evidence and therefore cannot fully grasp its contents. Also, because there is no witness examination, the suspect cannot confront witnesses to exercise the right to cross-examination regarding testimonial evidence."
She continued, "In particular, for subjective elements such as intent, and for proof based on logic or evaluative aspects, a sufficient process of analysis and impeachment may be necessary," adding, "Given the level of substantiation and the progress of the investigation, rather than the necessity of detention due to concerns about destruction of evidence or flight, it is necessary to provide ample opportunity for defense while not in custody."
Prosecutors say Chairman Kim, despite recognizing Homeplus Co.'s credit rating downgrade and the possibility of corporate rehabilitation while MBK was the major shareholder, issued short-term bonds and other instruments, deceiving investors and causing losses. On the 7th, the prosecution sought an arrest warrant for Chairman Kim.
Appearing for a pre-arrest interrogation (substantive warrant review) on the 13th, Chairman Kim did not answer reporters' questions, including "Do you acknowledge the allegations?" "Do you acknowledge personal responsibility?" and "Please say a word to investors."
The substantive warrant review, which began at 10 a.m. on the 13th, did not conclude until 11:40 p.m. The questioning alone lasted about 13 hours and 40 minutes. This is the longest on record since the system was introduced in 1997. The previous record was former National Intelligence Service (NIS) Director Seo Hoon, who was arrested after 10 hours and 6 minutes of questioning in Dec. 2022 over the "West Sea civil servant shooting case." This was more than three hours longer.
In the substantive warrant review, prosecutors argued that Chairman Kim was involved in key decision-making, including filing for corporate rehabilitation, and asserted the need for detention given the seriousness of the crimes and concerns about destruction of evidence. MBK's defense team, in contrast, vigorously advanced a defense arguing complete denial of the allegations, and the court effectively appeared to side with MBK.
Arrest warrants were also rejected for Vice Chairman Kim Gwang-il of MBK Partners, Vice President Kim Jeong-hwan of MBK, and Homeplus Co. Chief Financial Officer (CFO) Lee Seong-jin, who underwent the substantive warrant review with Chairman Kim. The grounds for rejection are the same as for Chairman Kim. In addition to fraud and violations of the Financial Investment Services and Capital Markets Act, they face allegations of accounting fraud in the 1 trillion won range and of hindering credit rating agencies' work by failing to properly reflect Homeplus Co.'s financial condition in audit reports.
After the arrest warrants were rejected, MBK said in a statement, "We understand this decision as the court recognizing that MBK and Homeplus Co.'s positions are valid regarding the legal theory and facts of the case," adding, "We will faithfully clarify our position in future legal proceedings based on the facts and the law."