DP pressures MBK, Meritz to provide 100 billion won in emergency funds as Homeplus faces liquidation
In response, MBK Partners reportedly requested a 200 billion won loan agreement while Meritz Financial Group insisted that legal reviews and board approval were prerequisites for the funds' release.
An underground entry to a Homeplus branch in Seoul on July 5YONHAP
The ruling Democratic Party (DP) on Thursday urged MBK Partners and Meritz Financial Group to funnel emergency funds to keep Homeplus afloat due to the growing risk of liquidation.
MBK is a private equity firm and Homeplus’s majority stakeholder, while Meritz is the largest creditor of the struggling retail company.
The DP also asked the National Pension Service (NPS) — a major investor in Homeplus and MBK-managed funds — to revoke MBK’s status as an entrusted fund manager and recover its investment in the equity firm.
National Pension Service Chairman Kim Sung-joo, second from right, speaks during a parliamentary session for Homeplus's corporate rehabilitation in western Seoul on July 9.NEWS1
The DP’s committee for public livelihood, chaired by Rep. Min Byoung-dug, held a series of meetings with executives from MBK and Meritz, as well as NPS ChairmanKim Sung-joo, at the National Assembly in Yeouido, western Seoul, on Thursday.
MBK is accused of knowingly issuing short-term financial bonds to individual investors despite recognizing Homeplus’s rating drop and need for corporate rehabilitation.
“The immediate priority is to secure 100 billion won [$66.1 million] in emergency operating funds before the July 20 appeal deadline,” Rep. Min said. “If Homeplus collapses, nearly 100,000 people — from employees and suppliers to local businesses — will be affected. As creditors and investors, [Meritz and MBK] have a duty to fulfill their social responsibilities.”
During the meeting, Homeplus CEO Jo Ju-yeon, MBK Vice Chairman Kim Kwang-il and Meritz Fire & Marine Insurance CEO Kim Joong-hyun apologized to the stakeholders affected by the crisis and promised to do “their utmost to come up with practical solutions.”
Once the meeting went behind closed doors, however, the two sides exposed their differences regarding the conditions for releasing the emergency funds.
“Both sides were attaching stringent conditions to the disbursement of the 100 billion won that lawmakers had believed was already secured,” DP Rep. Kim Nam-Geun, a committee member, said. “They’re holding back the emergency funds.”
MBK Partners Vice Chairman Kim Kwang-il speaks during a session for Homeplus's corporate rehabilitation at the National Assembly in western Seoul on July 9.YONHAP
The Seoul Bankruptcy Court previously assessed that sustaining Homeplus’s business would require 200 billion won, which MBK had vowed to cover. However, the equity firm has recently taken a more defensive stance.
“MBK Partners Chairman Michael ByungJu Kim’s personal guarantee is possible only after a 200 billion won loan agreement is signed,” the equity firm said.
Meritz, meanwhile, reportedly insisted that legal and financial reviews and board approval were prerequisites for releasing the funds.
“It’s hard not to suspect that they are moving ahead with liquidation in mind,” Rep. Kim said. “The National Assembly will convene a hearing on Homeplus to determine whether the company is being deliberately steered toward liquidation.”
The DP also sought to pressure MBK through the NPS, one of the equity firm’s largest institutional investors. The state pension fund has invested about 2.5 trillion won in 11 funds managed by MBK.
“Given the repeated asset sales and the controversy over whether MBK has fulfilled its fiduciary duty to investors, we need to reassess from the ground up whether it is appropriate to maintain MBK’s status as an entrusted fund manager and continue those investments,” Rep. Min said.
“We urgently need legislation requiring the stewardship code to be applied when selecting and overseeing external fund managers, including those handling alternative investments, to prevent irresponsible management by private equity firms,” DP Rep. Kim Yoon said.
BY KO SEUNG-PYO [lee.soojung1@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
