Lone Star’s Purchase of KEB Legitimate, Court Rules
Bloomberg reports that yesterday a Seoul High Court ruled that Lone Star Funds’ 2003 purchase of Korea Exchange Bank (KEB) was legitimate, upholding a lower courts ruling of last year.
Concluding once again that there was no evidence to prove the prosecutors’ allegations that KEB’s CEO at the time, Lee Kang-won, and a former government official colluded to sell KEB at a discount.
This verdict puts Lone Star a step closer to selling control of KEB after two previous attempts (firstly to Kookmin Bank, and then to HSBC) fell through due to regulators refusing to approve the deal until all legal disputes were resolved.
Lone Star founder John Grayken said in September that he expected to sell KEB within a year after receiving “unofficial” support from the government, the article stated.
Kookmin Bank, South Korea’s largest, has previously indicated that it is still interested in KEB, with Hana Bank, the country’s fourth-biggest, also expressing interest.
A timeline of events of the Lone Star – KEB case can be found here, additionally this report from Dr. Arthur J. Alexander of the US-Korea Instititute provides a excellent summary of the case and subsequent ramifications.
(Sources: Bloomberg, NY Times, US-Korea Institute at SAIS)
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