Lee Chan-jin (Director), "Homeplus' 200 billion won DIP, must consider exclusion from subordinated bonds"...National Assembly Political Affairs Committee

*This content was translated by AI.

The National Assembly Political Affairs Committee held a meeting on Homeplus on the 21st, raising concerns about whether the 200 billion won emergency operating funds (DIP) provided for Homeplus' corporate restructuring truly serve the purpose of MBK Partners sharing responsibility.

In response, Lee Chan-jin, Chairman of the Financial Supervisory Service, also proposed that it is necessary to consider excluding DIP from subordinated bonds, which have repayment priority.

Lee Kang-il, a lawmaker from the Democratic Party of Korea, raised a question during the Political Affairs Committee meeting on Homeplus held at the National Assembly on this day, stating that "DIP funds do not appear to be for MBK's responsibility sharing." Previously, Meritz Financial Group decided in its recent board meeting to provide 200 billion won in emergency operating funds (DIP) loans to Homeplus, based on the premise of Chairman Kim Byung-ju of MBK Partners and a guarantee from MBK Partners.

Lee (Rep.) responded, "(The DIP) is not a safety device for future takeover. The DIP will take the form of public interest bonds." He pointed out that "once restructuring approval is granted, it will be repaid 100% before payments to cooperating suppliers, which is contradictory." He further emphasized, "I think MBK is not taking on risks but rather seizing the initiative in the restructuring process."

Lee (Rep.) also stressed, "Is a major shareholder collecting their own money as public interest bonds responsible capital injection? We must track and check whether these funds are used to restore normal operations for small and medium-sized suppliers' stores or if they are used as a defense to block MBK's responsibility."

In response, Kwon Dae-young, Vice Chairman of the Financial Services Commission, replied, "The court is leading this, and we will look into it." However, Lee Gang-il (Rep.) stated, "It is not enough to just look into it; there must be communication. I am worried that it might become a direction where only pardons are provided without relief." Vice Chairman Kwon responded, "I agree. The MBK management team must take a responsible stance."

Lee Chan-jin, Chairman of the Financial Supervisory Service, also expressed the same opinion. Chairman Lee suggested, "This is not the existing method, but it appears necessary to actively consider a way to convey to the government that the part related to DIP bonds should be excluded from public interest bonds through consultation with the Financial Services Commission."

Furthermore, regarding this Homeplus crisis, he also promised swift sanctions against MBK and others. Chairman Lee stated, "We are currently investigating violations of the Capital Markets Act during an on-site inspection targeting MBK Partners and proceeding with sanction procedures. We have also conducted inspections on Hana Securities, among others, which face allegations of incomplete sales of distribution bonds." It is known that the Financial Supervisory Service confirmed violations of the Capital Markets Act by MBK and imposed severe sanctions, including "suspension from duty."

Meanwhile, during today's meeting, Korea Zinc, which was in a management rights dispute with MBK, was also mentioned. Kim Hyun-jeong, a lawmaker from the Democratic Party of Korea, said, "Is Korea Zinc not a national key industry? If MBK participates in its management like Homeplus, significant national losses are expected." She added, "You must watch closely. It is necessary to strengthen the social responsibility of private equity funds."

National Assembly Jeong Mu-wi (Director) Yoo Dong-su (Rep.) also stated, "In the UK, there is a system that grants operating licenses for key industries. Are you considering this? Transferring national key industries, including Korea Zinc, to private equity and leaving them to autonomous management appears problematic for government authorities. Please conduct in-depth research and request consideration when the bill subcommittee deliberates."

Meanwhile, Homeplus announced on the 22nd that as its restructuring process is extended, it plans to focus on normalizing operations and structural innovation work.

According to Homeplus, as soon as the emergency operating funds (DIP) loans are received, it plans to open all 67 key stores currently under temporary suspension. The goal is to improve cash flow by prioritizing the procurement and sale of essential goods with high sales volume and fast turnover.

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*This content was translated by AI.