The prosecution has raided the headquarters of retail giant Homeplus as part of its investigation into allegations surrounding the retailer’s application for rehabilitation.

The Seoul Central District Prosecutors’ Office sent its prosecutors and investigators to the headquarters in western Seoul on Monday morning to carry out a search.

The prosecution is also reportedly raiding the headquarters of the private equity giant MBK, the largest shareholder of Homeplus. 

The prosecution is investigating the management of the private equity firm and the retailer on fraud allegations.

MBK and Homeplus are suspected of issuing asset-backed short-term bonds even though they had prior knowledge of a decline in the retailer’s credit rating and were preparing to apply for court-led rehabilitation for the retailer.