Shinyoung Securities and Three Other Securities Firms Sue Homeplus Management for Fraud Allegations

by Shim Seongah

Published 01 Apr.2025 18:44(KST)

Four securities firms, including Shin Young Securities, which issued and sold bonds of Homeplus, have filed a lawsuit against Homeplus on charges including fraud.

A Homeplus store in Seoul. Photo by Yonhap News

According to the financial investment industry on the 1st, four firms?Shin Young Securities, Hana Securities, Hyundai Motor Securities, and Eugene Investment & Securities?submitted a complaint in the afternoon against Homeplus and its management for violations of the Act on the Aggravated Punishment of Specific Economic Crimes (fraud) and other charges.

Shin Young Securities issued "Asset-Backed Short-Term Bonds" (ABSTB; asset-backed electronic short-term bonds) based on credit card payments just before Homeplus’s credit rating was downgraded, while the other three firms distributed these bonds in the market. They suspect that Homeplus, despite knowing the possibility of a credit rating downgrade, tacitly allowed the issuance of ABSTB and then abruptly filed for corporate rehabilitation procedures, thereby shifting the repayment responsibility onto investors.

Furthermore, although Homeplus agreed to recognize ABSTB as trade receivables that could be repaid normally, the timing of repayment and the method of securing funds remain uncertain.

According to the office of Kang Min-kook, a member of the People Power Party, as of the 3rd of last month, out of the outstanding short-term bonds including Homeplus’s commercial paper (CP), ABSTB, and electronic short-term bonds totaling 594.9 billion KRW, the amount sold to individual investors through securities firms was identified as 207.5 billion KRW.

According to data compiled by the Financial Supervisory Service, the issuance scale of Homeplus ABSTB is 41.9 billion KRW, of which individual investors purchased 177.7 billion KRW.

An industry insider said, "We have been waiting for an effective relief plan since the commencement of rehabilitation, but despite considerable time passing, there has been no meaningful progress. Later, they said they would treat the securitized bonds as trade receivables and include them in the rehabilitation plan, but since there is no repayment period or scale, effectiveness is not guaranteed, and there has been no progress, so this was an unavoidable choice."