Will 'Homeplus Scandal' MBK Chairman Michael ByungJu Kim Be Arrested? ... Warrant Hearing Underway

[Financial News] Michael ByungJu Kim, Chairman of MBK Partners and the main figure behind the so-called 'Homeplus scandal,' now stands at a crossroads over whether he will be taken into custody.
Jungho Park, a senior judge in charge of warrants at the Seoul Central District Court, will hold a pretrial detention hearing (substantive warrant review) for four individuals starting at 10 a.m. on the 13th: Chairman Kim, Gwang-il Kim, Vice Chairman of MBK Partners and co-CEO of Homeplus, Vice President Kim Jeong-hwan, and Managing Director Lee Sung-jin.
The Anti-Corruption Investigation Division 3 of the Seoul Central District Prosecutors’ Office, led by Prosecutor Kim Bong-jin of the Seoul Central District Prosecutors' Office Anti-Corruption Investigation Division 3 as acting chief prosecutor, requested arrest warrants for them on the 7th on charges including fraud under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes and violations of the Financial Investment Services and Capital Markets Act (FSCMA).
The 'Homeplus scandal' refers to a case in which Homeplus and its major shareholder MBK Partners allegedly caused losses to investors by issuing and selling a large volume of Asset-Backed Short-Term Bond (ABSTB) despite knowing that the company’s credit rating was about to be downgraded.
Prosecutors are said to have concluded that MBK Partners inflicted losses on investors by issuing bonds totaling 116.4 billion won—106.4 billion won in ABSTB, 10 billion won in commercial paper (CP), and short-term corporate bonds such as Straight Bond (SB)—between February 17 and 25 last year without disclosing that its credit rating could be downgraded.
Prosecutors believe that MBK Partners was aware of the possibility of a credit rating downgrade even before it issued ABSTB on February 17 last year, and it is reported that they also secured indications that as early as 2023 the firm was preparing for a potential corporate rehabilitation of Homeplus.
Korea Ratings Corporation downgraded Homeplus’s credit rating from 'A3' to 'A3-' on February 28 of the same month, and just four days later, on March 4, Homeplus filed for corporate rehabilitation (court receivership) with the Seoul Bankruptcy Court.
Prosecutors believe that MBK Partners was aware of the possibility of a credit rating downgrade even before it issued ABSTB on February 17 last year, and it is reported that they had already obtained indications in 2023 that the company was preparing for the corporate rehabilitation of Homeplus.

kyu0705@fnnews.com Kim Dong-gyu Reporter