Arab Today, arab today keb sale to gather pace as lone star gives up appeal
Last Updated : GMT 16:28:19
Arab Today, arab today
Arab Today, arab today

KEB sale to gather pace as Lone Star gives up appeal

Arab Today, arab today

Arab Today, arab today KEB sale to gather pace as Lone Star gives up appeal

Seoul - Yonhap

Lone Star Funds has decided not to appeal a Seoul court\'s guilty verdict against the U.S. private buyout fund, clearing the way for the speedy sale of its controlling stake in Korean Exchange Bank (KEB), sources said Thursday. The decision by Lone Star, which owns a 51.02 percent stake in the No. 5 lender in South Korea, came following a recent court ruling that found the U.S. private equity firm guilty of stock manipulation charges, they said. A week ago, the Seoul High Court ruled the U.S. buyout firm and its former South Korean unit chief Paul Yoo were guilty of manipulating stock prices and imposed fines of 25 billion won (US$22 million) and 4.3 billion won, respectively. Both parties were given a one-week deadline to appeal the verdict. The decision is expected to expedite a 4.41 trillion won deal between Lone Star and Hana Financial Group Inc., the country\'s fourth-largest banking group, that has been in legal limbo since the Financial Services Commission (FSC), the country\'s financial regulator, indefinitely delayed approval, citing the lawsuit over Lone Star\'s stock manipulation charges in its 2003 purchase of a KEB credit card unit. \"Future schedules will be announced early next week upon a legal review,\" FSC Chairman Kim Seok-dong told reporters. Following last week\'s court ruling, the FSC said it may order Lone Star to sell the bulk of its KEB stake if it fails to meet legal requirements as the lender\'s major shareholder. \"If Lone Star fails to meet the requirements, it will be ordered to sell the stake that exceeds its holding limit,\" the FSC said in an e-mailed statement, without clarifying the method and timing of any possible stock sale. Korean law bans an executive or corporate entity from being the primary shareholder of a local bank if convicted of a crime during the last five years. As Lone Star\'s decision not to appeal the conviction strips the U.S. fund of eligibility to be a major shareholder, market watchers said the financial regulator is set to order Lone Star to sell a 41.02 percent stake in KEB. According to the law, Lone Star, now convicted, is eligible to own no more than a 10 percent stake in KEB. \"If Lone Star gives up on lodging an appeal, the legal uncertainties will be completely repelled. There is no reason for the government to take further time,\" an FSC official said. Shares of Hana Financial and KEB closed higher on speculation the Thursday decision will clear regulatory hurdles and pave the way for the stalled sale. Hana Financial soared 7.03 percent to 38,800 won and KEB jumped 4.35 percent to 7,920 won. If the FSC orders Lone Star to sell its KEB stake, the U.S. buyout fund will succeed in making an exit from South Korea after two botched attempts. Its previous deals with Kookmin Bank in 2006 and HSBC in 2008 failed due to regulatory issues and the global financial crisis, respectively.

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Arab Today, arab today keb sale to gather pace as lone star gives up appeal Arab Today, arab today keb sale to gather pace as lone star gives up appeal

 



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