Seoul: A Seoul court is set to hold a hearing Tuesday to decide whether to issue arrest warrants for the chairman of private equity firm MBK Partners, Kim Byung-ju, and three other senior executives over sales of short-term bonds of troubled retailer Homeplus Co. The Seoul Central District Court will conduct the hearing at 10 a.m. after prosecutors sought arrest warrants for Kim and other senior executives, including a co-chief executive of Homeplus, on charges of fraud and violation of the Capital Markets Act. A decision on their potential arrest is expected to come out as early as later this day.
According to Yonhap News Agency, MBK Partners acquired a 100 percent stake in Homeplus in 2015 from British retailer Tesco Plc for 7.2 trillion won (US$4.9 billion). The retailer, however, became financially strapped due to a slump in the discount store industry and eventually entered court-led rehabilitation proceedings in March last year. MBK Partners has been accused of allegedly selling a large-scale short-term bond of Homeplus around the time of the credit downgrade for the retailer.
On February 28 last year, Korea Ratings downgraded its credit rating of Homeplus to "A3 minus" from "A3." Four days later, Homeplus asked a court to grant rehabilitation proceedings.