A Seoul court has rejected the prosecution’s request for a warrant to detain Kim Byung-ju, the chairman of private equity firm MBK Partners, who is seen as a key figure in the Homeplus fraud scandal.

The Seoul Central District Court on Wednesday also dismissed warrant requests for Homeplus CEO and MBK Vice Chairman Kim Kwang-il, MBK Vice President Kim Jeong-hwan and Homeplus Chief Financial Officer Lee Sung-jin, explaining that while it’s clear the damage from this case is very serious, the evidence submitted so far is insufficient to substantiate charges warranting detention.

Presiding Judge Park Jeong-ho said it is important to provide adequate opportunities for the suspects to defend themselves while not in custody and that this outweighs concerns about the risks of flight or destruction of evidence.

As a result of the court’s decision, all four MBK executives will be investigated without detention.  

Last week, the Seoul Central District Prosecutors’ Office filed warrants for the four executives, accusing them of fraud, including breaches of the Capital Markets Act and the Act on the Aggravated Punishment of Specific Economic Crimes. 
 
In addition, Kim Kwang-il, Kim Jeong-hwan and Lee were charged with manipulating audit reports.
 
Prosecutors believe Homeplus and its majority shareholder, MBK, issued large-scale bonds in February 2025 even though they were aware the retailer’s credit rating would be downgraded, and then later filed for court receivership, which resulted in losses for investors.

Prosecutors said they also found circumstantial evidence that the MBK executives had been directly briefed on Homeplus’ management deficit since the end of 2023.