MBK Partners Chairman Kim Byung-joo Faces Travel Ban Amid Homeplus Bond Investigation

The prosecution investigating the 'Homeplus bond scandal' has reportedly imposed a travel ban on Kim Byung-joo, the chairman of MBK Partners, who is identified as a key figure in the case. According to legal sources on May 19, the Anti-Corruption Investigation Division 3 of the Seoul Central District Prosecutors' Office, led by Chief Prosecutor Lee Seung-hak, has taken this action through the Ministry of Justice. This measure appears to be aimed at facilitating a smooth investigation following Kim's recent return to South Korea after spending an extended period abroad.

Under the Immigration Control Act, the Minister of Justice can restrict the departure of foreigners deemed unsuitable for travel during a criminal investigation. Since Kim holds U.S. citizenship, this travel ban is not the same as those applied to South Korean nationals.

On May 17, upon his arrival at Incheon International Airport, Kim was immediately subjected to a search and seizure operation by the prosecution. This marked the second forced investigation following a previous raid on his residence on April 28. Reports indicate that Kim became a target of the investigation after returning from a business trip to the UK.

During the first search, the prosecution was unable to seize Kim's mobile phone, but they reportedly obtained it and other relevant materials during the second raid.

The investigation is focused on whether the management of Homeplus and its major shareholder, MBK Partners, attempted to offload losses onto investors by issuing bonds after being informed of a downgrade in their credit rating. Prosecutors are examining whether the executives of both companies sold approximately 82 billion KRW worth of bonds through domestic securities firms, including Shin Young Securities, on February 25, despite having prior knowledge of the impending downgrade.

Korea Ratings and Korea Corporate Ratings downgraded Homeplus's credit rating from 'A3' to 'A3-' on February 28, just days before Homeplus filed for rehabilitation proceedings on March 4. Issuing bonds while planning for corporate rehabilitation, which freezes financial obligations, could be considered fraudulent trading that deceives investors. Homeplus and MBK have stated that they were unaware of the credit rating downgrade at the time of the bond issuance and sale.

The prosecution plans to summon Kim, along with Kim Kwang-il, Vice Chairman of MBK and co-CEO of Homeplus, and Jo Joo-yeon, CEO of Homeplus, for questioning once the analysis of the seized materials is complete.