US investment fund Lone Star, which is being investigated over suspected tax and currency irregularities, said yesterday it planned to donate 100 billion won (US$106 million) as a "social contribution" to the Korean people.
The donation, announced by Lone Star chairman John Grayken at a sometimes tumultuous press conference, comes as South Korean prosecutors investigate the private equity fund's taxes, currency transfers and its purchase of shares in 2003 of Korea Exchange Bank (KEB).
Late last month, Dallas, Texas-based Lone Star struck a deal with top South Korean lender Kookmin Bank to sell all of its 50.53 percent stake in KEB, along with an additional 14.09 percent stake it is set to buy back from two other major KEB shareholders, for 6.42 trillion won.
Industry analysts estimate Lone Star could reap about 4.5 trillion won from the sale, which means the 100 billion won contribution would represent about 2.2 percent of such investment gains.
The activities of private equity funds have been controversial in South Korea since the aftermath of the 1997-1998 Asian financial crisis, when foreign capital played a huge role in helping to revive the world's 11th-largest economy.
Some Korean lawmakers and media have accused foreign funds of being so-called "vulture capital" out to make a quick profit by purchasing Korean companies and banks at a discount and then selling their investments for large profits.
Grayken also said that Lone Star was cooperating fully with South Korean authorities and has committed to set aside 725 billion won "to settle any taxes that may be due" on its potential gain from selling the KEB shares.
Grayken said Lone Star had never knowingly evaded taxes or been accused of evading taxes in any country in which it operates.
"We apologize for any misunderstandings that have occurred as a result of our investments," he said.
Separately, South Korea's finance minister yesterday defended the sale of a local bank to US investment fund Lone Star, denying the government illegally rushed through the deal.
Han Duck-Soo said KEB would have collapsed unless Lone Star took it over in 2003 at a time when no other investor was willing to put money into the failing bank.
Lone Star bought a 51 percent stake in KEB for 1.38 trillion won in October 2003. The acquisition was arranged by the government as part of efforts to consolidate the banking sector in the aftermath of the Asian financial crisis.
"At that time Lone Star was the only investor who expressed interest in KEB. Without its investment, the bank would have gone under," Han told reporters at a seminar.
Activists have accused former KEB executives and government officials of exaggerating KEB's poor financial health so they could achieve a quick deal.
State auditors have also questioned former and current government officials about allegations that the government illegally rushed through the sale of KEB to the US company.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique