A Hollow Audit Without Kim Byung-joo; Questions on Accountability for the Homeplus Crisis Fail to Materialize

[Financial News] The National Assembly audit, which had been set to scrutinize the responsibility of Homeplus’s largest shareholder, MBK Partners, over the company’s rehabilitation, was effectively a hollow exercise because key witnesses were absent. MBK Chairman Kim Byung-joo did not appear at the audit venue, and Homeplus CEO Cho Joo-yeon, who was expected to attend in his place, was not selected as a witness that day. As a result, lawmakers were unable to question the company on key issues such as financial support and mergers and acquisitions (M&A).
At the National Assembly’s audit of the Ministry of SMEs and Startups by the Committee on Industry, Trade, Energy, SMEs and Startups on the 7th, Chairman Kim, who had been designated as a witness, was absent. Kim had previously submitted a written explanation for his absence, citing reasons including that he does not get involved in the management of individual portfolio companies and that Homeplus is undergoing rehabilitation proceedings under court supervision. He had said that CEO Cho would attend in his place, but that plan also fell through.
Criticism of Chairman Kim began as soon as the committee’s audit got underway that day. Woo Jae-joon, a lawmaker from the People Power Party, said, “As repayment of claims for goods has been delayed during Homeplus’s rehabilitation, the damage to small business owners is growing.” He added, “This case is one in which the richest person in South Korea, Chairman Kim Byung-joo, has cheated small business owners out of their money.” He called Kim’s absence “irresponsible” and proposed that the committee approve an order compelling him to attend and refer him for prosecution if he refused. Committee chair Kim Seong-won said the matter would proceed after consultations between the ruling and opposition parties’ committee representatives.
It remains unclear, however, whether an order compelling Kim to attend will actually bring him before the committee. Under the Act on Testimony and Appraisal before the National Assembly, a committee may issue such an order, and a witness who refuses may be subject to punishment. However, the law is understood not to authorize the physical forcible apprehension of a witness. Unless other measures are taken or Kim appears voluntarily, it will be difficult to ask him directly about responsibility and plans for financial support at this year’s audit.
Homeplus has a long list of challenges to address. According to the rehabilitation plan it submitted, the company owes about 503.2 billion won in unpaid supplier payments, of which repayment of about 398.4 billion won, or 79.2%, has been deferred until February 2030. The key task of M&A is also still in its infancy. Last month, Homeplus said it would sell 67 hypermarket stores, along with its headquarters and online business division, through a business transfer, and begin individually selling 19 properties it owns at stores slated for closure.
Calls for a return to normal operations are continuing on the ground. The Homeplus branch of the Mart Industry Workers’ Union and some opposition lawmakers held a press conference at the National Assembly that day, saying uncertainty over delayed wage payments and product shortages persisted even after the rehabilitation plan was approved. They stressed that MBK must responsibly provide operating funds until an M&A deal is completed.
Min Byung-deok, head of the Democratic Party of Korea’s Euljiro Committee, said, “Just two weeks after the plan was approved, the company is postponing wage payments and has not even set a date for bonus payments.” He added, “MBK and Chairman Kim Byung-joo, as the root cause of this crisis, must show a responsible attitude.”
[email protected] Kim Hyun-ji Reporter