South Korea is resisting World Bank order to pay Lone Star
SEOUL, South Korea (AP) — South Korea plans to challenge a World Bank court’s order to pay $216.5 million plus interest to Lone Star Funds, based in South Korea, after a decades-long dispute over the sale of the Korea Exchange Bank by the private equity firm to pay texas .
South Korea’s Justice Minister Han Dong-hoon said on Wednesday his government found the ruling unacceptable because the financial authorities handled the 2012 sale without error. He said the department is considering seeking a repeal of the order and other steps so “not a penny of our nation’s blood-like taxpayer money goes to waste.”
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 just 4.6% of the $4.68 billion Lone Star had asked for, according to Han’s ministry, which represents the government in legal cases.
Lone Star initiated the arbitration in 2012, alleging that South Korea’s financial regulator unfairly delayed its review process over the sale of KEB, effectively forcing the buyout firm to sell the bank at a lower price.
Lone Star acquired a controlling interest in KEB in 2003 as South Korea slowly emerged from the shock of the 1997-98 Asian financial crisis.
Lone Star originally planned to sell its stake in HSBC, but the British bank dropped its $6 billion bid in 2008 after South Korean authorities delayed approving the deal. 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 in 2012 for 3.9 trillion won ($2.9 billion).
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