FSC vows strict sanctions against MBK over Homeplus crisis

Financial Services Commission Chairman Lee Eog-weon pledged to handle sanctions against MBK Partners over the Homeplus liquidity crisis in accordance with the law, more than three months after the Financial Supervisory Service completed its review.

Lee made the remarks during a parliamentary audit by the National Assembly's Political Affairs Committee on Thursday, saying authorities were reviewing the case and would take a strict approach.

“We are reviewing the relevant details and opinions,” Lee said in response to a question from Rep. Min Byung-duk of the ruling Democratic Party of Korea. “We will handle the matter strictly in accordance with the law and principles.”

Min questioned why no final decision had been reached 98 days after the FSS sanctions review committee concluded its deliberations on July 2. He also raised concerns about MBK Vice Chairman Kim Kwang-il's continued involvement in Homeplus' management.

Financial industry sources expect possible heavy sanctions, including a partial suspension of business operations. The Securities and Futures Commission and the FSC must approve the final decision.

Depending on the scope, sanctions could restrict MBK's ability to launch new funds or make investments, although the impact would depend on whether they extend beyond its Homeplus-related operations.

Separately, Kim has expressed his intention to step down as an administrator of Homeplus, which is undergoing court-led rehabilitation.

The Seoul Bankruptcy Court is consulting major creditors on a successor, according to industry sources. Cho Joo-hyun, Homeplus' co-administrator and chief executive, could take over the role alone, or the court could appoint a third party. Kim is expected to remain in the position until a successor is appointed.

Kim's decision follows MBK's completion of a full write-off of its Homeplus shareholding on Sept. 14. Under the court-approved rehabilitation plan, Korea Enterprise Investment Holdings, Homeplus' largest shareholder, canceled all of its approximately 2.4 million common shares in the retailer.