MBK

SEOUL, July 9 (UPI) — A lawyer whose firm is suing MBK Partners over investor losses has urged the financial company to repay debts owed to those who purchased asset-backed bonds related to Home Plus, South Korea’s troubled discount chain.

LawVax attorney Jang Jin-seok stated that position during an interview with UPI on Tuesday. The Seoul-based law firm filed a criminal complaint with the prosecutors late last month against senior executives of MBK and Home Plus.

Included in them were MBK Chairman Michael Byungju Kim and Home Plus co-CEOs Kim Kwang-il and Joh Joo-yun.

The complaint alleges that they issued or helped issue commercial papers and asset-backed, short-term bonds knowing that Home Plus lacked the capacity to repay them, causing investors to lose about $400 million.

“Due to mounting losses and deteriorating credit ratings, Home Plus relied on short-term funding to stay afloat, and toward that end, it devised unique asset-based bonds, which attracted individual investors,” Jang said.

“And all of a sudden, Home Plus filed for corporate rehabilitation in early March, just after its credit ratings downgrade. This indicates that the retail chain had no intention of repaying its debts. At the very least, MBK and Home Plus must address this issue,” he said.

Home Plus refuted Jang’s claims.

“Home Plus made every effort to turn the business around to the last minute, as shown by its attempts to reduce debt ratios,” a company spokesperson said in a phone interview.

“However, these efforts were not fully effective, as the virus pandemic and the rise of e-commerce continued to negatively impact our business,” he said.

Home Plus noted that its debt ratio improved to 462% as of this January, compared to 1,506% in the same period of 2024.

MBK acquired Home Plus from Tesco in 2015 for $5.1 billion. However, the company has been in steady decline, particularly since 2021, posting consecutive annual losses.

Its operations suffered due to the COVID-19 pandemic and the rapid rise of online retailers like Coupang, which eroded its traditional brick-and-mortar business model.

On Feb. 28, South Korea’s credit rating agencies downgraded Home Plus’s corporate rating from A3 to A3-. Four days later, it filed for corporate rehabilitation with the Seoul Bankruptcy Court.

“It seems that MBK gave up Home Plus last year and dispatched Kim Kwang-il to the company to oversee its exit strategy,” Jang said.

“And the credit ratings cut may have convinced MBK and Home Plus that short-term funding was no longer viable, so they chose to walk away without caring about the debts owed to individual investors.”

Kim Kwang-il was appointed co-CEO of Home Plus early last year to lead the corporation with Joh Joo-yun, former chief of McDonald’s Korea.

Jang criticized Kim for taking on too many roles, noting that he reportedly serves multiple positions for 18 companies, mostly MBK affiliates like Home Plus and Lotte Card.

In regard to a potential sale of Home Plus, Jang also was skeptical. MBK is seeking to avoid liquidation by selling the retailer. To do so, the outfit pledged to write off its entire stake in Home Plus worth $1.8 billion.

“MBK now claims that Home Plus is an attractive opportunity after cancelling $1.8 billion stake,” Jang said. “If that is true, why doesn’t MBK take over operations of Home Plus again? In case MBK can revive the supermarket chain, it does not have to give up its stake on Home Plus.”

In response, Home Plus said that the attempt to sell the company is aimed at saving nearly 20,000 employees, along with numerous suppliers and stakeholders. It added that MBK has made significant sacrifices to support this.

May 13 (UPI) — South Korean prosecutors raided the country’s two rating agencies Monday to investigate suspicions surrounding the bond issuance of Home Plus, the troubled discount chain.

Home Plus is accused of selling a large volume of short-term bonds just before its credit ratings dropped on Feb. 28. The prosecution is checking whether Home Plus had prior knowledge of the credit downgrade.

If so, Home Plus, which filed for corporate rehabilitation on March 4, could face legal consequences, along with its owner MBK Partners, one of Asia’s largest private equity funds.

Since the financial obligations of Home Plus were frozen as of March 4, issuing bonds while planning the court-led rehabilitation filing could constitute fraud against investors, according to observers.

Home Plus has denied the allegations as its CEO Joh Ju-yeon stated during a parliamentary hearing in March.

“We only held an emergency meeting with executives (about the rehabilitation filing) after the credit rating cut,” he said.

However, Financial Supervisory Service Gov. Lee Bok-hyun rejected this. The organization is the country’s financial regulator.

“We have secured concrete evidence that MBK Partners and Home Plus were aware of the downgrade in advance, and they had been planning to file for rehabilitation for quite some time,” he told a press conference late last month. “The case has been formally referred to prosecutors.”

Days after Lee’s statement, the Seoul Central District Prosecutors’ Office carried out a search and seizure at the head office of Home Plus in western Seoul.

Adding to MBK’s troubles, the National Tax Service (NTS) started a tax audit of the corporation in early March. MBK claims that it’s a routine audit conducted every five years. But a non-regular inspection unit is reportedly in charge of the case.

In late March, the Fair Trade Commission reportedly launched an investigation into MBK, Home Plus and Lotte Card over alleged unfair internal transactions.

Lotte Card is suspected of providing preferential corporate card terms and credit limits to Home Plus. MBK is also the largest shareholder of the credit card company.

Asia’s top-tier private equity fund

Founded in 2005 by Chairman Michael Byungju Kim, who worked at Goldman Sachs and the Carlyle Group, MBK Partners quickly became a powerhouse in Northeast Asia.

The company has dealt with many landmark transactions such as Universal Studios Japan in 2009, ING’s South Korean unit in 2013 and Godiva Chocolatier’s Asia-Pacific operations in 2019.

MBK has succeeded with control-oriented buyouts in stable and defensive sectors. It currently manages up to $30 billion in assets to rank among the top players in Asia.

As the firm grew, so did Chairman Kim’s personal fortune. In the 2025 Forbes billionaire list, he was top among South Koreans with $9.5 billion in wealth, surpassing Samsung tycoon Lee Jae-yong with $8.2 billion.

Riding the momentum, MBK made a big bet on Home Plus in 2015 by spending around $5.1 billion to purchase the supermarket chain from Tesco.

MBK financed the deal with $1.6 billion in equity and the remaining $3.5 billion in loans, which marked the largest leveraged buyout in Asia. At the time, Home Plus was South Korea’s No. 2 discount chain with around 140 hypermarkets and 700 smaller stores nationwide.

However, rising online competition and the Corona virus pandemic dealt a blow to the business. Home Plus posted four consecutive years of losses since 2021, with its debt ratio nearing 500% this January.

Critics argue that MBK Partners relied excessively on debt and focused on short-term returns over long-term value.

“MBK has been under fire for lacking management expertise,” Lee Phil-sang, an adviser at Aju Research Institute of Corporate Management, told UPI.

“Private equity funds in other countries also follow similar practices. We cannot legally ban them. However, they should be more cautious because their large-scale failures like this can hurt the broader economy,” said Lee, who previously worked as an economics professor at Seoul National University.

The Home Plus crisis is expected to negatively affect MBK’s multi-billion-dollar attempt to snap up Korea Zinc, the world’s largest zinc smelter. MBK is pursuing the takeover in partnership with Korea Zinc’s top shareholder Young Poong.

“While MBK has suffered from setbacks in other merger and acquisition deals, none were as large as Home Plus,” Seoul-based consultancy Leaders Index CEO Park Ju-gun said in a phone interview.

“This crisis is highly likely to damage MBK’s reputation and hinder its bid for Korea Zinc,” he projected.

Comments from MBK were not available.