South Korea objects to World Bank's order to pay Lone Star
South Korea says it plans to challenge a World Bank tribunal’s order to pay $216.5 million plus interest to Texas-based Lone Star Funds following a decade-long dispute over the private equity firm’s sale of the Korea Exchange Bank
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.South Korea says it plans to challenge a World Bank tribunal’s order to pay $216.5 million plus interest to Texas-based Lone Star Funds following a decade-long dispute over the private equity firm’s sale of the Korea Exchange Bank.
South Korean Justice Minister Han Dong-hoon said Wednesday that his government finds the ruling unacceptable because there is no fault in the way financial authorities handled the 2012 sale. He said the ministry is considering seeking an annulment of the order and other steps so that “not a penny of our nation’s blood-like taxpayer money is spilt.”
Han spoke hours after the Seoul government received the ruling from the World Bank’s International Center for Settlement of Investment Disputes. The payment ordered by the tribunal represented only 4.6% of $4.68 billion Lone Star had demanded, according to Han’s ministry, which represents the government in legal cases.
Lone Star initiated the arbitration in 2012, claiming that South Korea's financial regulator unfairly delayed its review process over the sale of KEB and effectively forced the buyout firm to sell the bank at a lower price.
Lone Star acquired a controlling stake in the KEB in 2003, when South Korea was slowly wiggling out of the shock unleashed by the 1997-98 Asian financial crisis.
Lone Star had initially planned to sell its stakes to HSBC, but the British bank dropped its $6 billion bid in 2008, after South Korean authorities delayed their approval of the transaction. They cited legal concerns after a former Lone Star executive was found guilty of manipulating the stock price of a KEB credit-card unit.
Lone Star eventually sold its stake to South Korea’s Hana Financial Group for 3.9 trillion won ($2.9 billion) in 2012.