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[Alpha Biz= Kim Jisun] South Korea’s National Tax Service (NTS) has launched a tax investigation into MBK Partners, the private equity firm and major shareholder of Homeplus, following the retailer’s unexpected entry into corporate rehabilitation, which sent shockwaves through the market.
According to industry sources on Tuesday, the Seoul Regional Tax Office’s Investigation Bureau No. 4 has dispatched officials to MBK Partners to conduct the audit.
Unlike routine tax audits conducted every four years, Investigation Bureau No. 4 is known for targeting specific irregularities. It has previously handled high-profile cases, including Hyundai Motor Group’s slush fund scandal and the Park Yeon-cha Gate. More recently, the bureau has investigated conglomerates such as CJ and SK.
Industry insiders speculate that the NTS is scrutinizing MBK’s capital recovery process, particularly in light of Homeplus’s corporate rehabilitation filing and MBK’s involvement in the Korea Zinc management dispute. Given Homeplus’s recent financial troubles, the probe is expected to be an extraordinary (irregular) tax audit.
MBK acquired Homeplus in 2015 through significant leveraged financing and has spent the past decade repaying debt through store sales while also collecting dividends. Just before Homeplus filed for rehabilitation, MBK reportedly sold commercial paper (CP) to investors.
Homeplus entered rehabilitation proceedings after its credit rating was downgraded on February 28. Korea Ratings lowered Homeplus’s CP and short-term bond rating from A3 to A3-, citing a decline in the company's profitability.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
