Prosecutors summon MBK chairman Byung-joo Kim over Homeplus case

South Korean prosecutors have notified MBK Partners Chairman Byung-joo Kim that they want to question him on Aug. 11 over the so-called Homeplus case.

The Seoul Central District Prosecutors’ Office’s Anti-Corruption Investigation Division 2 is investigating allegations including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and violations of the Capital Markets Act. Kim’s appearance has not been confirmed, and the parties are still coordinating the details.

Prosecutors have been questioning MBK executives in succession as they build their case. They summoned MBK Vice Chairman Kim Jung-hwan on July 20 and questioned Kim Kwang-il, MBK vice chairman and co-CEO of Homeplus, on July 24.

Investigators believe MBK executives, the controlling shareholder of Homeplus, knew the retailer’s credit rating was falling when they issued a large volume of short-term bonds and unexpectedly applied for corporate rehabilitation. Prosecutors say the moves shifted losses onto investors. Their view is that the bonds were issued before Homeplus and MBK received the first notice of a credit-rating downgrade on Feb. 25 last year.