Fair Trade Commission Conducts On-Site Investigation into MBK, Homeplus, and Lotte Card 'Unfair Internal Transactions' Allegations

Yonhap News

The Fair Trade Commission has launched an investigation into allegations of unfair internal transactions involving MBK Partners, Homeplus, and Lotte Card.

According to industry sources on the 25th, the Fair Trade Commission sent investigators to the headquarters of MBK Partners, Homeplus, and Lotte Card to conduct on-site inspections. The investigators carried official documents stating that the investigation was to verify violations of Article 47 of the Monopoly Regulation and Fair Trade Act (Fair Trade Act) and are currently securing related documents and materials from the offices of the three headquarters.

The purpose of this on-site investigation is reportedly to verify facts related to allegations that Lotte Card applied favorable transaction conditions, such as corporate card limits, to Homeplus, an affiliate of its parent company MBK Partners. They are also examining whether Homeplus’s annual payment of large dividend amounts, characterized as interest, to MBK, the major shareholder, constitutes unfair internal transactions.

In 2015, MBK acquired Homeplus for 7.2 trillion won and, to finance the acquisition, Homeplus borrowed 5 trillion won in its name. Of this amount, 700 billion won was raised by creating a special purpose company (SPC) called Korea Retail Investment and issuing Redeemable Convertible Preferred Shares (RCPS).

It has been pointed out in the National Assembly’s Political Affairs Committee that Homeplus’s annual payment of over 100 billion won in other expenses to MBK through these RCPS may constitute unfair internal transactions.

This content was produced with the assistance of AI translation services.