Lawmakers grill CEO on voluntary retirement terms, unpaid vendor debts

'We are not billing departing tenants for restoration costs,' CEO says

Homeplus CEO Cho Ju-yeon. [Herald DB]
Homeplus CEO Cho Ju-yeon. [Herald DB]

Homeplus CEO Cho Ju-yeon said Monday that the retailer's sales recovery remains "very limited" as it can only conduct transactions on a prepayment or cash basis.

Cho made the remarks while appearing as a witness before the National Assembly's Political Affairs Committee national audit, responding to questions from Democratic Party of Korea lawmaker Min Byeong-deok about the company's voluntary retirement program. "What we had hoped for through the 200 billion won ($149 million) debtor-in-possession emergency operating fund was a normalization of sales and supply," Cho said. "The plan was to increase inventory and sales through credit transactions."

Cho added that she was "deeply sorry" and said she believes the current crisis can best be resolved if the merger and acquisition process proceeds as planned.

Min said the voluntary retirement package included no separate consolation payment, and asked whether Homeplus was obligated to pay outstanding wages, chuseok bonuses and severance — all of which, he said, the company should be paying as a matter of course.

Lawmakers also asked whether Cho intended to resign following Vice Chairman Kim Gwang-il's recent announcement of his own resignation. Cho said she had not offered to resign.

Responding to People Power Party lawmaker Seo Il-jun's questions about unpaid bonds owed to vendors, Cho said the company is scheduled to receive letters of intent for an acquisition by the end of October. "The best approach is to move quickly on the M&A and repay all outstanding bonds as soon as possible," she said.

Asked whether Homeplus had billed departing tenants for restoration costs, Cho said it had not. On whether the company could offer separate loss compensation or other support to vendors, she said it currently lacked the capacity to do so.


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