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🇰🇷 South Korea /Economy & Trade

South Korean Official Criticizes Homeplus Takeover, Cites Past Deregulation

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Sources not specified In the courts
  • A South Korean presidential aide criticized MBK Partners' acquisition of Homeplus as "unethical" and linked the retailer's bankruptcy risk to deregulation of private equity funds during the previous administration.
  • The Seoul Rehabilitation Court decided to terminate Homeplus's rehabilitation proceedings, requiring the company to secure 200 billion won within 14 days to avoid liquidation.
  • The aide also criticized a U.S. House committee report alleging discrimination against U.S. firms like Coupang, calling it inappropriate and urging Coupang to resolve issues domestically rather than escalating them diplomatically.

Hong Ik-pyo, a senior presidential secretary, has sharply criticized MBK Partners' acquisition of Homeplus, labeling it an "unethical" merger and acquisition process. He attributed Homeplus's current financial distress and risk of bankruptcy to the deregulation of private equity funds enacted during the previous Lee Myung-bak administration. Hong stated that the government intends to provide the maximum possible support within legal frameworks.

The merger and acquisition process was flawed, and the damage is now evident.

— Hong Ik-pyoThe presidential secretary criticizes the acquisition of Homeplus by MBK Partners.

The Seoul Rehabilitation Court recently decided to terminate Homeplus's rehabilitation proceedings. This decision means the company must secure approximately 200 billion won (about $145 million) within 14 days to avoid liquidation. Hong highlighted the Homeplus situation as a prime example of the negative consequences that can arise from flawed mergers and acquisitions, particularly concerning the potential for large-scale job losses and widespread damage to suppliers.

Hong also addressed a report by the Republican members of the U.S. House Judiciary Committee, which accused the South Korean government of discriminating against American companies like Coupang. He deemed the report "highly inappropriate" for unilaterally reflecting Coupang's perspective. Hong urged Coupang, despite being a U.S. company, to resolve its business issues in line with public expectations in South Korea rather than leveraging U.S. congressional or governmental influence to turn it into a diplomatic matter.

The deregulation of private equity funds during the Lee Myung-bak administration exposed risks, and the damage is now confirmed.

— Hong Ik-pyoThe presidential secretary links Homeplus's crisis to past deregulation policies.

He emphasized that the government must actively explore ways to improve related systems to prevent such incidents from recurring. The focus on systemic improvements aims to address the root causes of the crisis and ensure greater accountability in the private equity sector, particularly concerning its impact on major retailers and the broader economy.

It is highly inappropriate to unilaterally reflect Coupang's position.

— Hong Ik-pyoThe presidential secretary criticizes a U.S. House committee report on Coupang.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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