Monday, 29 August 2016
Last updated 2 days ago
Oct 7 2011 | 11:52am ET
A Korean court has rapped private equity firm Lone Star Funds for manipulating the stock price of a bank in which it owns a controlling stake.
The Seoul court fined a Lone Star unit US$21 million and sentenced the former head of its South Korean office, Paul Yoo, to three years in prison. On the bright side, the ruling appears to clear the way for Lone Star to sell its stake in Korea Exchange Bank to Hana Financial Group for US$4.1 billion.
That deal had been held up by the court proceedings, and even if it were not in place, would likely be required by the court, which will probably disqualify Lone Star as KEB's largest shareholder, forcing it to reduce its stake to 10%.
KEB itself was acquitted in the retrial, which was triggered by allegations that Yoo spread falsehoods about a possible capital reduction at KEB's credit card unit in 2003.