MBK Partners, the largest shareholder of Homeplus, South Korea's second-largest hypermarket chain, is facing allegations of suspicion for issuing commercial paper until just before filing for corporate rehabilitation, claiming it did not anticipate a credit rating downgrade. MBK has explained that it could not have foreseen the credit rating decline given the excessive debt ratio at Homeplus and delays in settling some trade payables. However, industry insiders question MBK's explanation, pointing out that the debt ratio already exceeded 1,400%, a level comparable to major corporations that faced defaults or severe insolvency during the 1997 IMF financial crisis. Additionally, suspicions of "commercial paper fraud" have been raised regarding MBK's abrupt issuance of commercial paper despite being aware of the possibility of a credit rating downgrade. If MBK proceeded with commercial paper issuance despite foreseeing the credit rating decline that directly triggered the corporate rehabilitation filing, severe social criticism due to moral hazard could intensify, and criminal liability is also possible. In conclusion, MBK's process of issuing Homeplus commercial paper and filing for corporate rehabilitation reveals problematic issues that could cause significant losses to investors, and discussions regarding relevant legal responsibilities are necessary.
