Homeplus headquarters in western Seoul (Newsis)
Homeplus headquarters in western Seoul (Newsis)

Financial regulators have launched an inspection of MBK Partners, signaling a renewed full-scale review of its portfolio company Homeplus.

The Financial Supervisory Service, the country’s top watchdog, recently initiated disciplinary proceedings on MBK by issuing an inspection report. The authorities are reportedly reviewing the private equity firm's takeover of Homeplus, including the financing and leveraging procedures.

The latest probe comes as MBK and Homeplus executives face prosecutorial scrutiny for allegedly concealing plans to file for court receivership while issuing 600 billion won ($430 million) of short-term bonds tied to the supermarket chain. The financial authorities referred the executives to the prosecution in April.

The FSS plans to schedule a disciplinary screening committee after receiving MBK’s response to the inspection report. The regulator will issue prior notice on the level of sanction, with the final decision to be confirmed by the Financial Services Commission.

Financial regulatory sanctions are imposed in the order of caution, warning, suspension, to license revocation, depending on the severity of the violation. If MBK faces sanctions heavier than a “warning,” institutional investors, such as the National Pension Service, could impose penalties, including suspension or termination of delegated asset management.

Considering MBK is an equity firm that manages assets pooled from institutional investors, such a move could significantly affect its fundraising capabilities and overall investment operations.

With the newly appointed FSS chief Lee Chan-jin having voiced criticism of MBK, industry speculates that the private equity giant could face heavy discipline from the regulators.

“Investing in MBK Partners or appointing it as a delegated asset manager would constitute a breach of duty toward the NPS contributors,” Lee said in July last year, when the pension fund operator selected MBK to manage some of its assets, while he was serving as the chairman of the policy advisory committee at the non-governmental organization People’s Solidarity for Participatory Democracy.

Regarding the latest probe, MBK reiterated its previous stance, stating, "Neither Homeplus nor MBK Partners anticipated a downgrade in Homeplus’ credit rating, nor did we prepare in advance for corporate rehabilitation."

The firm added, "We will fully present our stance during the regulatory probe."

Meanwhile, Homeplus has been shutting down its branches to keep up with the rehabilitation proceedings. On Sunday, it announced that it has decided to close five branches in November, followed by the shutdown of 10 additional outlets in May 2026.

The retailer explained that it decided to close the branches after failing to reach agreements on lease terms, as rent takes a large chunk out of Homeplus' operating profits.

“Even five months after the commencement of the rehabilitation process, the business environment has not improved, and financial pressure has been intensifying," a Homeplus official stated.

"The measure is part of a high-intensity self-rescue plan aimed at easing financial pressure and strengthening the foundation for rehabilitation.”


silverstar@heraldcorp.com