The FSS announced that it concluded discussions on the inspection results of MBK Partners during its 14th sanctions review committee meeting held on July 2.
Based on the review results, the FSS plans to finalize the details of the sanctions and submit them to the Financial Services Commission (FSC). However, it noted that "specific details regarding the level of sanctions cannot be disclosed yet as the sanction process is still ongoing."
The sanctions review committee serves as an advisory body to the FSS chairman, and its decisions do not carry legal weight. Any severe sanctions above a warning must be finalized through reviews by the Securities and Futures Commission and the FSC.
This decision comes approximately five months after the conclusion of two previous sanctions reviews in December and January, which were postponed for legal review. The review was completed just one day before the Seoul Bankruptcy Court's deadline for approving Homeplus's rehabilitation plan.
According to financial sources, the FSS is expected to uphold the severe sanctions, including the previously announced suspension. Under the Capital Markets Act, sanctions against GPs are categorized as institutional warnings, institutional reprimands, suspensions of up to six months, and demands for dismissal, with suspensions being equivalent to a significant penalty for general asset management firms. Reports suggest that the sanctions may also include suspensions for key executives.
This case has drawn significant industry attention as it represents the first attempt to impose a suspension on a PEF operator (GP).
A key issue in the sanctions review was whether MBK Partners violated the interests of investors, such as the National Pension Service, by altering the redemption conditions of redeemable convertible preferred shares (RCPS) in favor of Homeplus through a special purpose company (SPC) established during the acquisition process.
The FSS reportedly determined that MBK Partners diminished the possibility of recovering investment funds by waiving the RCPS redemption rights, thereby harming investor interests and violating the Capital Markets Act's provisions on unsound business practices and internal control obligations.
The FSS plans to submit the sanctions review results to the FSC, where the final disciplinary measures will be confirmed. If severe sanctions are ultimately approved, they could impact contracts with institutional investors, including the National Pension Service.
* This article has been translated by AI.
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