Private equity firms develop institutional habits. The structures they build, the financial engineering they deploy and the relationship between holding vehicles and operating companies tend to follow patterns that become visible across multiple investments. In the case of MBK Partners, a pattern has emerged in the use of special-purpose subsidiaries to restructure obligations and rights in ways that serve MBK’s control objectives while drawing regulatory scrutiny.
The Homeplus SPC
When MBK Partners acquired Homeplus from Tesco in 2015 for 7.2 trillion won, it established Korea Retail Investment, a special purpose company, to serve as the acquisition vehicle. The SPC became the mechanism through which MBK exercised control over the retailer. In February 2025, Korea Retail Investment signed an agreement with Homeplus to revise the terms of redeemable convertible preferred shares (RCPS) issued by the company. The amendment allowed Homeplus to reclassify the RCPS as equity rather than debt, reducing its debt-to-equity ratio from 1,408.6 percent to 425.9 percent, according to KED Global.
The FSS took a different view. Regulators concluded that the amendment caused the repayment priority of RCPS held by the National Pension Service to fall below that of other debt instruments, harming LP interests. The FSS issued MBK a prior notice of disciplinary action, including a potential suspension of new business, the first such measure against a private equity firm in South Korean history. The core regulatory finding was that MBK had used the SPC structure to restructure financial obligations in ways that shifted risk onto other stakeholders.
The YPC Structure
At Korea Zinc, a structurally parallel maneuver has unfolded through a different vehicle. In March 2025, Young Poong, acting in alliance with MBK Partners, established YPC, a wholly-owned limited liability company, and transferred its entire 25.42 percent stake in Korea Zinc to the new entity. The Fair Trade Commission is investigating whether the transfer created a prohibited circular cross-shareholding structure.
The structure of YPC mirrors the functional logic of the Homeplus SPC in several respects. YPC has no independent commercial operations. It is headed by Young Poong’s own CEO, Kim Ki-ho. Its stated business purpose is the acquisition, control and management of Korea Zinc shares. Legal analysts contend the entity was created to exploit the fact that mutual share voting restrictions under the Commercial Act do not apply to limited liability companies, thereby restoring voting rights that were otherwise restricted. A separate on-site investigation was conducted at Young Poong’s headquarters in December 2025.
The Structural Parallel
The Homeplus SPC and YPC serve different technical purposes. Korea Retail Investment was used to restructure financial instruments. YPC was designed to restructure voting rights. But both share a common structural logic: the creation of a subsidiary entity with no independent operations, used to rearrange obligations or entitlements in ways that benefit MBK’s alliance while circumventing protections designed for other stakeholders.
In the Homeplus case, the FSS concluded that the RCPS restructuring amounted to unsound business practices. In the Korea Zinc case, the FTC is evaluating whether the share transfer to YPC constitutes an illegal circular shareholding arrangement. Two separate regulators, examining two separate transactions at two separate companies, have identified the same underlying concern: that shell structures were used to route around rules designed to protect minority shareholders, pension fund investors and the broader integrity of Korean corporate governance.
Precedent and Implications
No published legal analysis has yet formally connected the Homeplus SPC and YPC as elements of a single pattern. The two cases have proceeded through different regulatory channels and involve different areas of law. But the structural similarities are difficult to overlook, and the regulatory responses have been strikingly parallel. The FSS’s disciplinary action against MBK was the first of its kind. An adverse FTC ruling on YPC would establish a new precedent for how Korean competition law treats subsidiary structures created to circumvent shareholding restrictions.
The Korea Zinc case carries particular weight because of the company’s strategic significance. Korea Zinc has partnered with the U.S. Department of War and Department of Commerce to build a $7.4 billion critical minerals smelter in Clarksville, Tennessee, a facility backed by JPMorgan and designed to produce 13 critical minerals essential to U.S. aerospace, defense and semiconductor supply chains. The question of who controls a company of this strategic importance, and through what governance structures, is not merely a matter of Korean corporate law. It has implications for supply chain security that extend well beyond the boardroom.
For regulators, the combined Homeplus and Korea Zinc cases present an opportunity to establish clear boundaries around the use of special-purpose subsidiaries in corporate control disputes. For shareholders, the pattern raises a more immediate question: whether a firm that has used shell structures to restructure financial obligations at Homeplus, with results that the FSS deemed harmful to stakeholders, should be trusted to exercise governance authority at one of the world’s most strategically important metals companies.