South Korea’s top financial regulator said yesterday he would try to fast-track the delayed US$6.3 billion sale of Korea Exchange Bank (KEB) by US buyout fund Lone Star.
Financial Services Commission Chairman Jun Kwang-woo said there had been a change in the government’s stance since former business executive Lee Myung-bak took office as president in February.
“The previous government was passive. Now we hope to find a quick solution to the issue, considering the development of our financial markets and the signals it would give to the international financial community,” he told reporters.
Lone Star has been embroiled in legal problems since it purchased a majority stake in KEB, the country’s fifth-largest lender, for US$1.5 billion in 2003.
The American Chamber of Commerce in Korea has urged courts to settle the case quickly, saying legal problems faced by Lone Star are scaring away much-needed foreign investment.
Lone Star has reached a deal to sell its 51 percent stake in KEB to global banking giant HSBC.
But the financial watchdog had previously withheld approval for the deal until court cases regarding Lone Star’s original purchase of the bank are concluded.
Prosecutors have been investigating allegations that KEB’s financial health was understated to help Lone Star buy it cheaply. They have accused six people of conspiring to manipulate the figures.
In a separate case, Paul Yoo, the head of Lone Star’s Korean unit, was sentenced to five years in prison in February on charges of stock manipulation following KEB’s takeover.
The court also convicted Lone Star and KEB of rigging shares and fined them a total of US$53 million. Yoo and Lone Star have both appealed.
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