The Seoul Central District Court dismissed on Wednesday prosecutors’ request to issue arrest warrants for MBK Partners’ billionaire cofounder and chairman Michael Kim and three other executives tied to his private equity firm and portfolio company Homeplus. The decision is the latest development in a nearly year-long fraud investigation into MBK Partners’ handling of Homeplus’ bond issuance just days before a credit downgrade.
South Korean prosecutors last week requested arrest warrants for Kim and the executives on charges of fraud and violation of the country’s Capital Markets Act. MBK Partners has denied wrongdoing. The court said the evidence submitted by the prosecutors was “insufficient” to support the warrants.
The prosecutors alleged that last February the four executives oversaw Homeplus’ issuance of 82 billion won ($56 million) in short-term bonds while anticipating a credit rating downgrade. Doing so without disclosing the imminent downgrade may have exposed investors to potential losses.
In March, just days after local credit rating agencies downgraded Homeplus, the company filed for court receivership, a type of court-led restructuring to avoid bankruptcy.
MBK Partners in a statement said they appreciated the warrants’ dismissal and that “the prosecution has misinterpreted the efforts undertaken by MBK Partners and Homeplus to restore the company through the rehabilitation process.”
“We understand the court’s decision to reflect its assessment that, based on the relevant facts and applicable law, the prosecution’s allegations were not sufficiently substantiated,” the firm added. “MBK Partners and Homeplus have taken difficult yet responsible actions as part of their efforts to advance the company’s rehabilitation, and will continue to make every effort to achieve a full and stable recovery.”
In 2015, Kim’s MBK Partners acquired Homeplus, formerly Tesco’s Korean subsidiary, for $6.1 billion—scoring against rivals KKR and Carlyle in a watershed buyout that marked South Korea’s largest private equity deal at the time.
But the Covid-19 pandemic and rise of online shopping hastened flagging sales at the discount chain, known for its low-cost groceries and household goods. By the end of 2025, Homeplus had reported four consecutive years of losses.
Kim, who topped Korea’s 50 Richest list last year, cofounded MBK Partners, the Seoul-based private equity firm that bears his initials and manages more than $32 billion in assets. His ING Insurance Korea, which went public in 2017, was the first company wholly owned by a private equity firm to list on the Korean exchange.
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