Homeplus, one of the country’s largest retail chains, filed for court receivership on March 4. (Image courtesy of Yonhap)
SEOUL, April 1(Korea Bizwire) — The country’s financial watchdog on Tuesday raised questions over the circumstances surrounding Homeplus Co.’s debt sale and filing for court rehabilitation and called on private equity firm MBK Partners Ltd. to be more responsible for the retailer’s fiasco.
The Financial Supervisory Service (FSS) has been inspecting MBK Partners, which controls Homeplus, to look into whether there had been any flaws in the process of the retailer’s short-term debt sale and its filing for court rehabilitation.
On March 4, Homeplus entered court-led rehabilitation proceedings after two rating appraisers lowered its credit rating, citing the company’s lack of efforts to improve its financial health.
But there has been speculation that the retailer had sold short-term debts in February despite being notified by a credit rating agency that its rating was likely to decline.
MBK Partners said earlier that it had drawn up measures for court-led rehabilitation from Feb. 28 after Homeplus’ ratings were lowered.
Hahm Yong-il, senior deputy governor of FSS for capital markets and accounting, said there have been some “meaningful” circumstances that run counter to explanations by MBK Partners over the proceedings for the court rehabilitation.
“There is a chance that MBK Partners had been aware of the possibility of a rating downgrade before the day it mentioned it,” Hahm said in a meeting with reporters.
Hahm called on MBK Partners to share the pain in handling the Homeplus case.
“Homeplus should be responsible for debt payments and other things,” Hahm said, and that it should unveil its detailed plans to gain market confidence.
Earlier, MBK Partners said its chair, Kim Byung-ju, will use his personal assets to support suppliers of the major discount store chain affected by the court-led rehabilitation process.
MBK has come under criticism for placing Homeplus under rehabilitation without making self-recovery efforts, even though its massive acquisition debt had led to the retailer’s financial difficulties.
(Yonhap)
